Eligibility of Work in SR&ED Projects Containing Software Development – CRA Webinar Review

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software development and technology illustration
A review of the CRA Webinar on SR&ED projects containing software development.

A CRA webinar on what types of work are eligible for the SR&ED tax credit in the realm of software development is featured on the CRA website. It runs just a little more than an hour, and may be useful for IT professionals to gain a greater understanding of what work falls under the umbrella of SR&ED. The PowerPoint slides provide additional information to the webinar transcript, and reading both may be an alternative to listening to and watching the webinar itself as the specific slides are documented in the transcript.

Examples Provided To Assist with SR&ED Identification

The webinar is useful as it gives examples of what meets SR&ED claims eligibility and what doesn’t, such as slides 49, 50 and 51 (shown below) also provide examples of what does and does not constitute a technological advancement.

CRA Webinar 49-50 Slides

The presentation walks through the five questions the CRA uses to establish if any SR&ED is involved in the software development. It is thorough and gives a good background to the misconceptions IT professionals may have when it comes to SR&ED eligibility.

One of the key points that the presentation drives home is that “technology is knowledge and not a physical thing”. Therefore, the key to meeting SR&ED claims eligibility is describing how the software component of a project advances the existing knowledge of a scientific or technological uncertainty. This means that simply adding a new function, which would be considered an innovation in the main definition of the term, will not qualify as SR&ED if it does not advance the existing knowledge base.

As this webinar points out (slide 46 above), failures can qualify for SR&ED if the reason the new product or technology failed advances scientific or technological knowledge. The presentation points out the importance of a good hypothesis that can be tested in terms of furthering this knowledge. This will help companies meet SR&ED claims eligibility more successfully.

Limitations of the CRA SR&ED Webinar

The webinar is quite jargon-heavy, so its main use will be for those with a computer science or engineering background. The webinar is also not exhaustive on the topic of SR&ED eligibility. It only looks at step one of two of the methodology behind whether work constitutes the definition of SR&ED: determining whether or not there is SR&ED involved. This may be useful for software developers as the webinar focuses on misunderstandings behind what kinds of software development meets SR&ED and what does not.

As the webinar points out, many SR&ED tax credit claims have software development as some component of the claim. The information is relevant to a much wider audience and so it is unfortunate that the webinar is so reliant on jargon.


Overall, the reliance on highly technical terms aims the webinar at a highly specialized audience. However, the webinar presents a good overview of what qualifies as eligible SR&ED in software development. This webinar should clear up any misconceptions of the SR&ED program for those who are developing software that could be eligible.

What do you think of the CRA’s webinar?

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Note: A list of dates for upcoming webinars can be found here. We commented on the webinar originally in an earlier article here.

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