How Do You Apply for SR&ED?

Updated to Reflect New Policies (2022) 
*** Some of the policies referenced were updated 2021-08-13. This article has been updated and is accurate as of 2022. *** 
Navigating the SR&ED Process
How do you apply for SR&ED?

Navigating the process to file an SR&ED claim can be confusing, but it doesn’t have to be.

The simple answer to this question is that you create and submit additional forms (called Schedules) on your corporate tax return. The information provided on SR&ED schedules helps the government determine whether your project meets the requirements of the SR&ED program. Below are the essential forms that need to be completed and submitted with your taxes:

T2SCH32 – T661 Scientific Research and Experimental Development (SR&ED) Expenditures Claim

This form allows you to fill out the expenses you incurred during the fiscal period of interest. The total cost for all SR&ED projects should be included here including salaries, sub-contractors, materials, etc. Consult the T4088 – Scientific Research and Experimental Development (SR&ED) Expenditures Claim – Guide to Form T661 for more information on how to fill out the expenditures part of the T661.1

T2SCH60 – Part 2 of the T6612 is project specific and will vary depending on the company. Some companies can describe all the work they conducted within a single project, while others will provide information for multiple projects across multiple T661 Part 2 forms. Regardless, this is where the Technical Narrative must be included, which describes the scientific or technological advancements in your project, as well as a description of how you went about achieving your objectives.

Be sure that you completely and fully answer the following questions on the corresponding lines of the form keeping in mind that there are length limitations:

Line 242 – What scientific or technological uncertainties did you attempt to overcome? (Maximum 350 words)

This is where you describe the scientific or technological uncertainty that led you to conduct your SR&ED. Scientific or technological uncertainty is described as “whether a given result or objective can be achieved, or how to achieve it, is unknown or uncertain due to an insufficiency of scientific or technological knowledge.3 The CRA recommends that you include the project’s objective and describe the scientific advancement or improved capability you were seeking.

Indicate the knowledge base you were working with at the start of the project. The knowledge base “consists of the combined knowledge of the resources within the business and those sources that are reasonably available publicly.”4 Be sure to describe the shortcomings or limitations of that knowledge base. In other words, you are to describe how the scientific or technological uncertainty in the knowledge base led you to undertake your project.

Line 244 – What work did you perform in the tax year to overcome the scientific or technological uncertainties described in line 242? (Maximum 700 words)

Describe the work you did in chronological order and clearly demonstrate the systematic nature of the investigation or search by describing, in this order:

  • The hypotheses designed to reduce or eliminate the uncertainties;
  • Experiments and/or analysis conducted to test the hypotheses;
  • The results obtained; and
  • The conclusions.

If this is a continuation of a previously claimed project, it is important that you focus on the work carried out during the tax year for which you are making the claim. If all or part of the work was performed on your behalf by contractors, include that work in your description and identify that the work was performed by contractors.5

Line 246 – What scientific or technological advancements did you achieve or attempt to achieve as a result of the work described in line 244? (Maximum 350 words)

Here you describe either the new scientific knowledge you gained or technological advances you achieved (or attempted to achieve) from the SR&ED project. Focus on how the work you describe in line 244 advanced the scientific or technological knowledge base that existed at the start of the project. Note that if you failed to make an advancement that constitutes as moving the knowledge base forward as you have ruled out one possible solution. What the CRA is looking for is an advancement in the underlying science or technology, not how the project moved forward your business or business practices.6

T2SCH31 – Investment Tax Credit

The federal government provides an enhanced 35% refund rate on eligible expenditures, while provinces add an additional percentage, which varies from province to province (generally about 10%). Schedule 31 (or T2SCH31)7 and related provincial forms are used to calculate the actual refund that your company is eligible for.

These forms primarily use the same costs that were already included on the T661, and many modern tax software packages can automatically fill these in. Regardless, these costs must be included in your claim, or the Canada Revenue Agency (CRA) may deny your claim on a procedural point.

Provincial Tax Credits

Also at this time, you should apply for provincial R&D tax credits while you are completing your federal government tax schedules. The CRA provides a summary of provincial and territorial R&D tax credits on the website.8 We also provide an interactive tax credit map.

Timing of the SR&ED Tax Credit

One key fact about the SR&ED program is that it is a tax credit. It is directly linked to the taxes that you file. SR&ED claims are always associated with an individual fiscal period, and cannot be combined. It does not matter if you have a single project that you have been working on for 5 years or 5 separate projects that all took 1 year each—you will ultimately file a separate SR&ED claim for each year and complete a T661 for each separate project.

There are two different methods by which you can file for SR&ED:

  1. The claim can be included with your original tax submission for a fiscal period; or
  2. You can wait and submit an amendment to your taxes.

The basic process for amendment is identical to applying with your original tax submission. However, it is very important to note that the amendment for a given tax year must be completed a maximum of 18 months after the end of the fiscal year in which you incurred the expenses.9

It is almost always advantageous to prepare your SR&ED filing with your original tax submission. While it is true that filing an amendment later gives you additional time to pull everything together, the longer you wait to submit the longer it takes for the government to process your refund.

The CRA has internal quality deadlines that outline how long it takes to process a given claim. According to service standards currently on the site at the time of this writing:

  • All claims which have been accepted as filed will be processed within 60 calendar days of the date we receive a complete claim.
  • Refundable claims selected for review/audit will be completed within 180 calendar days of the date we receive a complete claim.10

The sooner you receive your refund the sooner you can re-invest it back into your company.

Would you like more detailed information about how to complete the T661 and how to file an SR&ED claim?

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Show 10 footnotes

  1. Government of Canada. (December 14, 2020.) T4088 – Scientific Research and Experimental Development (SR&ED) Expenditures Claim – Guide to Form T661. (Accessed: October 11, 2022.) Retrieved from
  2. Government of Canada. (July 8, 2022). T661 Scientific Research and Experimental Development (SR&ED) Expenditures Claim. Accessed: October 11, 2022, from:
  3. Government of Canada. (August 13, 2021). SR&ED Glossary: Scientific or technological uncertainty. Accessed: October 11, 2022, from
  4. Government of Canada. (August 13, 2021). SR&ED Glossary: Scientific or technological knowledge base. Accessed: October 11, 2022, from
  5. Government of Canada. (December 14, 2020). T4088 – Scientific Research and Experimental Development (SR&ED) Expenditures Claim – Guide to Form T661. Accessed: October 11, 2022, from
  6. Government of Canada. (December 14, 2020). T4088 – Scientific Research and Experimental Development (SR&ED) Expenditures Claim – Guide to Form T661. Accessed: October 11, 2022, from
  7. Government of Canada. (September 9, 2022). T2SCH31 Investment Tax Credit – Corporations. Accessed: October 11, 2022, from:
  8. Government of Canada. (March 17, 2022). Summary of provincial and territorial research & development (R&D) tax credits. Accessed October 11, 2022, from
  9. Government of Canada. (November 26, 2020). SR&ED Filing Requirements Policy. Accessed October 11, 2022, from
  10. Government of Canada. (March 31, 2022). SR&ED Program Service Standards. Accessed October 11, 2022, from

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