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. ***
Are you working on an SR&ED claim? How do you know if it’s worth the effort? What will the potential payout be? Have you submitted your documents and are now wondering how much you might receive in reimbursements? If you haven’t already done so you should input your figures into our SR&ED calculator to get an idea of what to expect. It’s so popular we’ve even moved it to our main menu so it’s easier to find! But before you start plugging in numbers let’s do a quick refresh on the SR&ED program.
What is SR&ED?
The Scientific Research and Experimental Development (SR&ED) program has been in existence in some form or another since 1944.1 It is an iterative program designed to offer tax incentives to support the advancement of technological innovation in Canada. In fact, the SR&ED program is the largest federal support program for business research and development in the country.2
How do I know if my work qualifies?
We have written extensively about SR&ED eligibility! We have easy-to-read blog posts like “Am I SR&ED Eligible?” and “SR&ED – A Plain-Language Eligibility Quiz” for you to reference to determine whether or not your work qualifies for an SR&ED claim. Essentially, it boils down to the five main questions which appeared in the CRA’s Eligibility of Work for SR&ED Investment Tax Credits Policy from 2015-2021. The current Guidelines on the eligibility of work for scientific research and experimental development (SR&ED) tax incentives do not contain a direct reference to the five questions, however, they remain relevant within the judicial system. See our post discussing the importance of the five questions in more detail.
- Was there a scientific or technological uncertainty?
- Did the effort involve formulating hypotheses specifically aimed at reducing or eliminating that uncertainty?
- Was the overall approach adopted consistent with a systematic investigation or search, including formulating and testing the hypotheses by means of experiment or analysis?
- Was the overall approach undertaken for the purpose of achieving a scientific or a technological advancement?
- Was a record of the hypotheses tested and the results kept as the work progressed?
If you can answer yes to all five of the above questions, you are eligible to make an SR&ED claim.
Use our SR&ED calculator to get an estimate of what a possible refund might look like for your organization. For more personalized information and support, contact us to discuss how we can assist you in the preparation and submission of your SR&ED claim.
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- Government of Canada. Canada Revenue Agency. (2015, April 7.) Evolution of the SR&ED Program – a historical perspective Retrieved February 21, 2019, from https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/evolution-program-a-historical-perspective.html ↩
- Ibid. ↩