Administered by Canada Revenue Agency · Funded by Government of Canada · CRA
Canada's largest R&D incentive — refundable investment tax credit on eligible R&D salaries, contractors, and materials. Up to 35% refundable for CCPCs on the first $3M of qualifying expenditures.
SR&ED provides a federal investment tax credit on eligible scientific research and experimental development. CCPCs earn up to 35% refundable on the first $3M of qualifying expenditures; larger corporations earn 15% non-refundable. Filed as part of the T2 corporate return, with the T661 technical narrative and T2SCH31 schedule due within 18 months of fiscal year-end.
The total program pool, per-organization max, and what your contribution has to be.
Aggregate annual funding across all recipients. Includes federal and provincial allocations where applicable.
Up to 35% refundable on the first $3M in qualifying expenditures for CCPCs. 15% non-refundable above the $3M cap and for non-CCPCs. No matching contribution required — this is a claim against R&D costs already incurred.
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Find your matches →What our team has learned from filing this program hundreds of times.
SR&ED is the highest-ROI federal program for any R&D-active Canadian corporation. The bar for eligibility is technological uncertainty and systematic investigation, not commercial success — meaning failed experiments still qualify. Worth pursuing for any CCPC with >$50K in eligible salaries. The complexity is real: technical narratives, cost segregation, and audit-readiness matter. Getting it right typically requires a specialist.
The practical sequence, from a firm that files these claims every week.
Confirm the work involved technological uncertainty, systematic investigation, and generated new technological knowledge. Not every engineering task qualifies — the S/THERI framework helps separate SR&ED-eligible work from routine development.
Timesheet or Jira/Linear time-tracking against each SR&ED project. Segregate direct R&D labour, subcontractor invoices, and materials. Contemporaneous documentation is the single strongest audit defence.
Two 1,400-character narrative fields per project describing the uncertainty, the hypotheses tested, and the results. Reviewers read these first — poorly written narratives trigger review even when the underlying work is strong.
Detailed cost breakdown by SR&ED project, cross-referenced to the T661 narratives. Proxy vs. traditional overhead election, contractor treatment, and the enhanced-vs-basic-rate calculation all live here.
Attach T661 + T2SCH31 to the T2. Must be filed within 18 months of fiscal year-end (hard deadline — CRA does not accept late SR&ED claims). Refund typically arrives within 60–120 days for CCPCs with clean claims.
What you need ready before you apply.
The failure patterns we see most often in the review-desk piles.
Applications, approvals, and dollars funded across recent cycles.
Live estimator using this program's rate and cap. Drag the slider to see the impact on your project.
Enter the total cost of the project you want to fund with SR&ED. We'll estimate the grant amount, your matching contribution, and your net cost.
Estimates are illustrative — actual funding depends on eligibility, cost classification, and review outcomes. For a firm quote, book a call with our team.
Anonymized case studies from GovMoney's practice.
First-time claimant, 12 engineers, novel real-time collaboration engine. Two-project narrative, refund received in 78 days, zero adjustments on first-pass review.
Three years of accumulated SR&ED filed via voluntary disclosure. Enhanced narrative work on cardiac imaging algorithm; passed technical review with minor cost adjustments.
Pre-revenue CCPC, 4 engineers. Full 35% refund on Series-Seed R&D burn. Refund used to extend runway by ~4 months. Stackable with IRAP grant received in same fiscal year.
GovMoney's team can prepare, submit, and defend your SR&ED application end-to-end.
PhDs, CPAs, and ex-CRA auditors prepare, submit, and defend your application — audit-ready, on a success-fee basis. You stay focused on the business; we handle the forms, the narrative, and the back-and-forth with the agency.
Book a free consult →Questions we get from applicants every week.
Yes — this is one of the most misunderstood parts of the program. SR&ED eligibility is based on the presence of technological uncertainty and systematic investigation, not commercial success. A project that failed to achieve its technical objective can still be fully claimable if the work was documented as systematic experimentation to resolve the uncertainty.
It depends. Applying an off-the-shelf model to your data is not SR&ED. Developing novel model architectures, novel training strategies, or solving genuinely uncertain engineering problems in model deployment (latency, cost, accuracy) can qualify. The bar is whether the work required systematic experimentation to resolve technological uncertainty that a competent AI engineer could not have resolved by applying standard practice.
CCPCs earn 35% refundable on the first $3M of qualifying expenditures — meaning CRA cuts a cheque even if the company has no taxable income. Above $3M and for non-CCPCs, the rate is 15% non-refundable — it can only be applied against tax payable. Most tech startups qualify for the full refundable rate.
The T661 SR&ED filing deadline is 18 months after the end of the fiscal year in which the expenditures were incurred. For a December 31 year-end, the deadline is June 30 of the second-following year. CRA does not accept late SR&ED claims under any circumstances — miss the date and the credit is permanently lost.
Claims are risk-scored, and higher-risk claims get technical review. Common triggers: first-time large claims, weak or template-sounding narratives, cost patterns inconsistent with the narrative (e.g. massive marketing spend on a claimed technical breakthrough), or industry mismatches. A well-prepared claim with contemporaneous documentation and defensible narratives passes review cleanly the vast majority of the time.
Changes to the program tracked by our team.
Federal Budget 2026 confirmed SR&ED 2.0 legislative direction — enhanced rate cap increases to $6M in eligible expenditures for CCPCs, effective fiscal years starting after 2026.
CRA released updated T661 web filing interface with new AI-model project categorization dropdown.
New IC 2012-02 supplement clarifies AI/ML eligibility criteria — model deployment engineering work explicitly addressed.
Combinations our team files together for meaningful uplift, with live deadlines.
Three concrete moves. Do them yourself or hand off to GovMoney.
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