Make sure your SR&ED Project Titles hit the mark

Make sure your SR&ED Project Titles hit the mark

When applying to the Canada Revenue Agency for Scientific Research & Experimental Development (SR&ED) investment tax credits, the title you give your SR&ED project can ultimately decide its fate in the hands of a discerning CRA agent. Make sure you are on target for a successful application by following the guidance provided below.

Background: SR&ED Project Titles

When you are completing the “technical narrative” portion of the T661, one of the first sections you asked to complete is the project title (Line 200). The CRA reviewer reading your SR&ED project will scrutinize these 60 characters to establish “the nature of your scientific research and experimental development (SR&ED) work”.1 Line 200’s importance can’t be overemphasized.

 

An ideal title will check the following boxes:

  1. It will be free of commercial-based buzzwords.
  2. It won’t be the commercial product’s name.
  3. It should be engaging and descriptive.

Shaping a title can be difficult, but following these rules can make your title effective and establish the nature of your SR&ED with crystal clarity.

1. Commercial Buzzwords

Commercial buzzwords (for example: “product”, “business”, “low-cost”, etc.,) can have the CRA reviewer thinking your SR&ED is ineligible within seconds. The Eligibility of Work for SR&ED Investment Tax Credits Policy specifically states “marketability, or commercial significance of work is not relevant”.2 Commercial buzzwords are blood in SR&ED water. Be diligent to assert the experimental development claimed, and why it is eligible.

2. Product Names

When a product name is the title of a SR&ED application, it creates confusion. The development is not the larger product or endeavor – it is simply a certain aspect of it. The Eligibility of Work for SR&ED Investment Tax Credits Policy claims that a “company project contains one or more SR&ED projects”.3 Therefore your title being your product name is misleading. It can also suggest that your development was commercially focused – which is not ideal. You will want your project title to focus on the underlying technology. Phrase it to focus not on what it does, but how it does it.

3. Engaging, Descriptive Titles

Where possible, focus on the experimental development which you are claiming and its purpose. The title should explain “how the claimed work meets the SR&ED eligibility requirements”.4

Use the space allotted for the project title in an original, detailed way to help the reader understand “the nature and scope of the SR&ED”.5 Ensure that you emphasize the advancement or science/technology being explored. For example, the lackluster title “Smart Light Fixture” shines when it becomes “Light-sensitive light fixture able to self-schedule charging.” This intentional detail and focus on the development claimed ensures an intelligent, engaging title.

Important: Know Your Limits for

In the most popular tax software program for preparing SR&ED schedules, the section for your SR&ED project title (Line 200) has space for 60 characters. This count includes spaces. Take the time to determine exactly what you would like to say within the constraints of your form, to ensure it is not cut off in the tax software. Alternatively, the title can be listed both in Line 200 and at the start of Line 242 – but we don’t recommend using up space unnecessarily in this section for the title.

Summary

Once your title checks all three boxes, and you’ve used as much detail possible within the character limit, you’re good to go. The strong first impression made by your SR&ED project title is as essential to a strong SR&ED report for demonstrating your eligibility for the program.

What are your thoughts about Line 200? Let us know in the comments below!

Show 5 footnotes

  1. “Scientific Research and Experimental Development (SR&ED) Expenditures Claim Guide to Form T661.” Canada Revenue Agency, https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t4088/t4088-15e.pdf. Accessed 21 Aug. 2019.
  2. “Eligibility of Work for SR&ED Investment Tax Credits Policy.” Government of Canada, 24 Apr. 2015, https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/eligibility-work-investment-tax-credits.html#s2_1_4. Accessed 21 Aug. 2019
  3. “Eligibility of Work for SR&ED Investment Tax Credits Policy.” Government of Canada, 24 Apr. 2015, https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/eligibility-work-investment-tax-credits.html#s3_2. Accessed 21 Aug. 2019.
  4. “Scientific Research and Experimental Development (SR&ED) Expenditures Claim Guide to Form T661.” Canada Revenue Agency, https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t4088/t4088-15e.pdf. Accessed 21 Aug. 2019.
  5. “Scientific Research and Experimental Development (SR&ED) Expenditures Claim Guide to Form T661.” Canada Revenue Agency, https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t4088/t4088-15e.pdf. Accessed 21 Aug. 2019.

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