Filing a Claim


Despite the complexity of the SR&ED process, the tax incentives available to Canadian businesses engaged in R&D are significant enough to keep individuals and corporations to continue filing SR&ED claims. As with all areas of tax administration, policies related to SR&ED have continued to evolve and to some extent become stringent with respect to the eligibility criteria through tax reforms and policy amendments. Given the ever changing environment of the SR&ED program, it is vital that claimants adhere to the strict CRA guidelines in order to realize a successful claim.


Carefully tracking eligible SR&ED activities and expenditures is essential in preparing a claim. CRA requires that financial information must be broken down by project and cost category. In addition, activities must be divided into separate projects, and each project requires a separate technical report. Despite the rigid stipulations, the applicant does have freedom over the technology they want to work on because they believe it provides the maximum benefit to the business. The SR&ED program is project-based. The claimant chooses the project and does not have to wait for permission from any government or agency before they begin their work. Projects can and often do, span more than one fiscal year.



A complete SR&ED claim is comprised of the following:

  1. Technical Report:
  • The vast majority of the SR&ED claim is technical therefore it should be prepared as accurately as possible since it can easily trigger a CRA review
  • This report should identify the three SR&ED criteria involved in each eligible project:
    • Technological Uncertainties: description of technical problems encountered
    • Technological Content: description of the systematic and experimental approach utilized to resolve the problems
    • Experimental Advancement: the technical knowledge gained
  • These three criteria must be discussed in the context of technology and not product development or business and marketing applications
  • If the claimant uncovered or tried to overcome some technological limitation in achieving the sought after objective, then the project would likely be considered as an eligible SR&ED project
  • Routine engineering or development work, on its own, is not considered as eligible SR&ED work
  • Note: A project does not have to be a success in order to qualify for the grant
  1. Financial Report
  • Identifies eligible SR&ED expenditures that give rise to SR&ED tax credits
  • Federal SR&ED forms must be submitted by the reporting deadline
  • Appropriate provincial SR&ED may need to be completed as well
  • These forms require information such as:
    • List of employees who participated in the SR&ED projects including a description of their credentials as well as the costs allocated to the time they spent on the eligible work
    • List of all materials, subcontract work, capital costs and lease costs associated with each project
    • Statement of work for each contractor involved in the SR&ED activities
    • List of supporting documentation that can be made available to the CRA reviewers, upon request



A SR&ED claim requires that you file an income tax return along with the following:

  • Form T661 – SR&ED Expenditures Claim
  • Form T2SCH31 – Investment Tax Credit (Corporations), or
  • Form T2038(IND) – Investment Tax Credit (Individuals)



  • A SR&ED claim is normally filled with your year-end corporate taxes (T2) but they can also be amended (filed separately)
  • However it MUST be filed within 18 months of the corporation’s year-end , in which the SR&ED expenditures incurred
  • For example:
    • Tax Year Ended: December 31, 2014
    • SR&ED Filing Deadline: June 30, 2016  
  • For individuals, the reporting deadline is 17.5 months
  • The implication of the 18 month (for corporations) and 17.5 months (for individuals) filing deadline is that you are eligible to file a SR&ED claim for not only your most recently completed fiscal period, but potentially the year before as well
  • CRA is very rigid regarding the reporting deadline and late claims are NOT accepted
  • Therefore it is better to file your claim early, in case any necessary claim information was inadvertently left out
  • If you file near or at the deadline, it is essential that the claim is complete and accurate since it may not be possible for the CRA to advise you in sufficient time if anything is missing
  • If a claim is filed “incomplete” and not completed by the reporting deadline, it is denied
  • The end result is that your ability to claim SR&ED tax credits for that year will be lost



According to the CRA, examples of technical and financial supporting evidence are:

  • Project planning documents
  • Documents on design of experiments
  • Experimentation plan
  • Design documents and technical drawings
  • Project records, laboratory notebooks
  • Design, system architecture and source code (software development)
  • Records of trial runs
  • Project progress reports
  • Minutes of project meetings
  • Test protocols, data, results, analysis and conclusions
  • Final project report or professional publication
  • Photographs, videos
  • Prototypes, samples
  • Scrap, scrap records
  • Contracts, lease agreements
  • Records of resources allocated to the project, time sheets, activity records, payroll records
  • Purchase invoices and proof of payment
  • Accounting records

Note: This list is not comprehensive. Claimant should keep any documentation they feel will support their claim

If you are considering filing a SR&ED claim and are not quite sure how, then let CRI help. We will guide you through every step of the process and maximize your SR&ED tax credit claim.

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