Updated August 2026 · Verified against Canada Revenue Agency guidelines
▲ Growing ✓ First-Timer Friendly Tax Credit Offset Est. 1986
Tax Credit Federal Active

Scientific Research and Experimental Development (SR&ED)

Canada Revenue Agency
Maximum Credit
Up to 35% refundable ITC (enhanced rate for CCPCs on first...
Ongoing
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Difficulty
Hard
Payment
Tax Credit Offset
Trend
Growing
First-Timers
Friendly ✓
Credit rate
35%
Scientific Research and Experimental Development (SR&ED) provides Up to 35% refundable ITC (enhanced rate for CCPCs on first $6M); 15% non-refundable for others. Combined federal+provincial can exceed 50%. The Scientific Research and Experimental Development (SR&ED) tax incentives encourage businesses to conduct research and development in Canada. Applications are accepted on an ongoing basis. Approval odds: ~90% (GrantCompass analysis)
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Eligibility & Details

What this program funds and who can apply

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Program Description

The Scientific Research and Experimental Development (SR&ED) tax incentives encourage businesses to conduct research and development in Canada. Corporations, individuals, trusts and partnerships that do eligible work can claim a deduction against income and earn an investment tax credit (ITC) - a basic rate of 15%, or a refundable enhanced rate of 35% up to an expenditure limit for most Canadian-controlled private corporations and, for tax years beginning after December 15, 2024, eligible Canadian public corporations.

Eligibility Requirements

  • Canadian business conducting qualifying R&D activities (technological uncertainty, systematic investigation, technological advancement)
  • Must be filing Canadian corporate or business taxes and reporting income in Canada
  • R&D work performed in Canada
  • Claim filed within 18 months of fiscal year-end (absolute deadline, no extensions)
  • Contemporaneous technical documentation maintained throughout the R&D project
  • For the enhanced 35% refundable rate: must be a Canadian-Controlled Private Corporation (CCPC) with taxable income under $800K and taxable capital under $75M (enhanced expenditure limit phases out between $15M and $75M taxable capital — Budget 2025)
Provinces
Industries
All
Business Stage
Startup Growth Expansion

Quick Assessment

Difficulty
Hard
Competition
Low
First-Timer
Friendly

Funding Details

Amount
Up to 35% refundable ITC (enhanced rate for CCPCs on first $6M); 15% non-refundable for others. Combined federal+provincial can exceed 50%.
Type
Tax Credit
Level
Federal
Credit rate
Up to 35% of eligible costs
Deadline
Ongoing

Program Scorecard

Competition, effort, and approval at a glance

Competition
Low
Deadline
Ongoing
Approval
Entitlement
Approval Rate
~90%
Accessibility
--/5
Competition
--/5
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What's in this Playbook

Everything you need to claim Scientific Research and Experimental Devel...

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How to claim

Insider tips, common pitfalls, and what successful applicants look like

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Insider Tip

Submit your SR&ED claim together with your income tax return and at least 90 days before the reporting deadline so the CRA has time for an initial review and can ask for corrections before the deadline.

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Rejection Pitfalls 8

  • Work described as routine engineering or standard practice rather than addressing a genuine technological uncertainty
+7 more pitfalls
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Success Profile

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Evaluation Criteria

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Application Playbook

Step-by-step process, required documents, and expenses

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Application Steps

1 Document Throughout the Year Maintain contemporaneous technical records as you perform R&D: lab notebooks, design documents, test logs, meeting minutes, emails. Track employee time allocated to SR&ED projects weekly or biweekly. This is the most critical step — retroactive documentation is the #1 audit trigger.

Required Documents 8

Form T661, SR&ED Expenditures Claim (current version)
Form T2SCH31 (Investment Tax Credit - Corporations) or Form T2038(IND) (Investment Tax Credit - Individuals) to claim the ITC

Eligible Expenses 6

Ineligible Expenses 7

Claim timing

Deadline Notes

Ineligible Organizations

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Funding Stack Strategy

Compatible programs, clawback risk, and combined funding potential

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Compatible Programs

NRC IRAP Provincial R&D tax credits CanExport Innovation MITACS NSERC BDC loans/financing Ontario ORDTC/OITC, Quebec R&D Credit, BC SRITC, Alberta IEG
Combined Funding Potential See your total funding potential

Clawback Risk

Low Risk
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How Scientific Research and Experimental Devel... Compares

Side-by-side with similar programs

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Program Amount Difficulty Payment Deadline
Scientific Research and Experimental ... Up to 35% refundable ITC Hard Tax Credit Offset Ongoing
NRC IRAP Clean Technology Program $100,000–$500,000 Hard Mixed (Advance + Reimb.) Ongoing
CanExport Innovation Up to $37,500 Moderate Reimbursement Upcoming — the...
Mitacs Accelerate $15,000 per internship unit Easy Advance Payment Ongoing
NSERC College and Community Social In... Up to $120,000 Hard Advance Payment February 25 annually at...

Related Programs

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Frequently Asked Questions

Quick answers to the questions founders most often ask about Scientific Research and Experimental Devel...

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Can sole proprietors apply for SR&ED?
No — SR&ED requires filing corporate taxes. Sole proprietors must incorporate to claim. Only incorporated businesses (including CCPCs) qualify for the refundable 35% rate.
What's the realistic claim size for a small dev team?
A CCPC with 5 developers spending 50% time on R&D (combined salary ~$500K) typically gets $175K-$250K in federal+provincial credits. Average small business claim: ~$102K.
When must I file my claim?
Must file within 18 months of fiscal year-end. Claims filed with the T2 return (6 months after year-end) process fastest. Late claims face longer queues.
Why do most claims get rejected?
Weak technical narrative in Form T661 — failing to explain technological uncertainty, systematic investigation, and advancement. Vague descriptions are the top reason.
Can I stack SR&ED with provincial credits?
Yes — all provinces except PEI offer additional credits (3.5-30%) that stack on federal SR&ED. For example, Ontario adds 12.5% on top of federal rates.

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