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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!

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

  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!

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