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SR&ED Hacks – Hints for SR&ED Writing

 

Make every word count!

There are a number of small hints and tricks that only become apparent after working on SR&ED claims for a long period of time.  We’ve compiled a short list of tips and suggestions which may not be immediately apparent to a first time claimant.  Individually they will not have a huge impact on eligibility, however they may help smooth the process along and make preparing the claim a little easier.

1. Word Count Limits in Your T661

The information presented on the T661 can be confusing, and even contradictory at times.  If you download the official T661 form from the CRA website, the form clearly states that the word counts for technical narrative section are strict.  You have 350/350/700 words to describe your advancements/uncertainties/work performed.  Paring an entire year’s worth of work down into 1400 words is hard, and shaving off that extra 50 words can seem like pulling teeth!  Fortunately, there’s an alternative.

Most corporations use professional tax software to handle their returns (TaxPrep, TurboTax etc.)  The line descriptions for these programs are slightly different!

Lines? How many words is that?! [From TaxPrep]

This change was announced in November of 2010, and officially only applies to commercial, ‘approved’ tax software.  Each ‘line’ by definition can hold a maximum of 78 characters of text.  The reality of this means that the word count limits are no longer absolute, depending on the length of words used and the number of paragraphs introduced.  In many cases, ~425 words can be fit into 50 lines of text.  Narratives should never be loquacious and rambling, however this extra space can be used to further explain an important technological concept.

Acronyms are perfectly valid within SR&ED applications and make excellent tools to save word count and space.  All acronyms should be fully defined before using them however, unless they are very common in every day life (Laser, Radar etc.)  The initial CRA reviewer may not necessarily be an expert in your field, and so industry specific acronyms should all be explicitly defined first.

Similarly, hyphenated words/phrases also count as a single word for word-count purposes.

2. Topic Order is Important for SRED

A given project will often have many areas of investigation, with associated technological uncertainties and advancements.  These aspects will have varying degrees of importance within the SR&ED claim itself.  It is critical to discuss all of these different obstacles and advancements within the claim; however, it can be advantageous to present them in order of decreasing difficulty/importance.  The first item that a person reading through the report encounters should always be regarding the most significant uncertainty/advancement that you encountered during the fiscal period.

This approach allows the reader to immediately see and recognize why you were investigating the project.  It also tends to help frame the rest of the project with this difficulty in mind.  Introducing smaller obstacles/advancements first, even if more significant discussions appear later in the document, can lead to the impression that the project isn’t quite as technologically involved as it could be.

3. SR&ED Project Titles

A very common oversight made by first time claimants is naming the project using mundane or commercial language.  The project title is the very first description of the project that the reader will experience, and it is important to start them off on the right foot.  Commercial or business terms (e.g. ‘low-cost’, ‘user-experience’ etc.) can immediately bias the reader into thinking that the project is focused on financial constraints as opposed to the technological.  We also advise against using commercial product names in the product title (e.g. ‘Sharepoint integration’)  It is important to highlight the specific technology that was investigated during the fiscal period.  Project titles should be exciting!

This is particularly true when performing SR&ED in established/mature technology areas.  Using generic titles like “Image Analysis” or “Widget Investigation”, start the review off on a bad foot.  Drill down into the underlying technology and reference the specific advancements that were made!  “High Fidelity Music Transmission Platform” is much more interesting than “Music Collaboration Website”.  Project titles should not be completely filled with technological buzzwords which attempt to disguise the real advancement taking place, but they should emphasize that real innovative research was being conducted.  A total of 60 characters is allocated to the Project Title in most commercial software packages.  Use them!

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Do you have any other experiences with writing SR&ED narratives?  Share your comments below, or join our LinkedIn Group.

10 Comments
  1. The use of fixed pitch fonts (i.e.”courier new” in Word) within a fixed margin width and left alignment will help to view it like the RTAs will see it. Contact me through linked in for a basic template I developed a couple years ago for these spacing issues – if you request. it. Cheers

    • Any tips as to how to get around the 60 character limitation on project titles on the form 60′s?

      • Hi Sam,

        Unfortunately the 60 character limitation is a hard limit. They may expand this with the new version of the T661 form they are releasing in October, but it will likely just be a change to comply with the federal budget changes which are entirely financial.

        In the meantime, we would recommend including acronyms in the project title, particularly if they are relatively well-known in the industry. Just be sure to define them very early in the narrative to ensure clarity isn’t lost.

  2. Thanks for noticing us! If you have any other hacks that we can share with the group, that would be great!

  3. I have been taking advantage of that peculiarity for quite some time, often squeezing 400 words into lines 240 and 242 and 800 words into line 244.

    However, I was shocked by what I learned from one RTA today. Apparently, the CRA internal software truncates the technical narrative at exactly 350, 350 and 700 words, regardless of the number of lines, even when accepted by a commercial package such as Taxprep. If this turns out to be true, it means that all the 400 descriptions I have been submiting were truncated, and the few last sentences were simply left out.

    • Hi Philippe, thanks for the heads up! We haven’t noticed it ourselves, but the CRA is normally fairly closed lipped about their policies and internal work. As always, it is important to be as concise as possible, and one should always put the most exciting work first. We’ll look into this and try to confirm for everyone; maybe this is the local CRA office’s policy?

  4. Hi Trevor, thanks for your reply. I agree with you about the CRA not being very forthcoming regarding their internal works, but in this case, without giving me all the details, the RTA warned me not to put more words than indicated, even if the software I use accepts them, because they would simply be discarded automatically by the CRA software. For this reason, I highly doubt it would be a local policy.

    I am also investigating on my end. I will share my findings here for the benefits of everyone.

    • Hi Philippe,

      Thanks for taking the time to share your experiences as a professional in this space. Let’s see where this investigation takes us – as it will be important for readers to know.

      If we find out anything new, we’ll be sure to post it here as well.

      Thanks again!

  5. Hi Mark!

    Would you be able to share this with us? We’d be happy to set up a link to your website so others could benefit form your knowledge.

    Cheers.

  6. Hi Elizabeth and Trevor,

    I exchanged a few e-mails today with some CRA officials regarding the matter and “projects descriptions will not be truncated if they adhere to the 50 and 100 lines in Taxprep.” However, one added the following important remark:

    “The word limitation in the form (i.e. 350 words and 700 words) stand [sic]. This is our official position. You are able to fit more words into Taxprep because of a software limitation in CRA systems. We’d rather err on the positive than the negative (i.e give you a few extra words rather than deny you the full 350 word limit).”

    The stance I will personally take from now on is to not worry if my technical narratives exceed the limits by a few words, but I will certainly no longer try to take advantage of that peculiar situation to “squeeze” a few extra paragraphs like I used to.

    They thanked me for brining this situation to the CRA’s attention and assured me that they would immediately address the issue with their regional offices.

    I hope this sheds some light on the issue.

    Philippe

    PS – As a side note, whilst I was investigating the matter, one RTA told me the following anecdote. Apparently, he once received a “one-word” technical narrative. The claimant had replaced all the spaces between the words by hyphens in order to stretch-the-description-past-the-word-limit!

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