FAQ's

1. What is the SR&ED program?

The SR&ED program is a Canadian federal tax incentive designed to encourage companies to conduct research and development (R&D) in Canada.

It provides:

• Tax credits

• Cash refunds (for eligible companies)

These benefits help offset the cost of developing new or improved technologies, products, materials, or processes.

2. Who can apply for SR&ED?

Most businesses performing eligible R&D in Canada can apply, including:

• Canadian-Controlled Private Corporations (CCPCs)

• Public corporations

• Foreign-owned companies operating in Canada

• Partnerships

• Sole proprietors

However, CCPCs usually receive the highest refundable credits.

3. What types of work qualify?

Three main categories qualify:

1. Basic research – advancing scientific knowledge

2. Applied research – solving specific scientific or technological problems

3. Experimental development – creating or improving products, processes, or materials

The project must involve technological uncertainty and experimentation.

4. What expenses can be claimed?

Eligible SR&ED expenses typically include:

• Salaries and wages of employees doing R&D

• Payments to contractors

• Materials used during experiments

• Certain overhead and operational costs

• Cloud computing used in experiments (in some cases)

5. How much money can companies receive?

The amount depends on company type.

Typical ranges:

• CCPCs: up to 35% refundable tax credit on eligible R&D expenses

• Other corporations: about 15% non-refundable tax credit

Many startups recover 30–40% of their R&D costs.

6. Does software development qualify?

Yes—software projects often qualify if they involve technological uncertainty.

Examples include:

• Developing new algorithms

• Creating new data processing architectures

• Optimizing systems for extreme performance

• Building new cybersecurity detection methods

Routine app development or standard website building usually does not qualify.

7. Can failed projects still qualify?

Yes.

Even if a project fails technically or commercially, it may still qualify if the company:

• Attempted to resolve technological uncertainty

• Conducted systematic experimentation

Documented the R&D process

8. What documentation is required?

The Canada Revenue Agency expects companies to maintain documentation such as:

• Technical project descriptions

• Experiment logs or testing results

• Development notes

• Design documents

• Time tracking for R&D staff

• Financial records

Good documentation greatly improves the chances of approval.

9. When is the SR&ED claim deadline?

SR&ED claims must be filed within 18 months after the end of the company’s fiscal year.

Claims are submitted as part of the corporate tax return.

10. How long does it take to receive the refund?

Processing time varies:

Typical timelines:

• Refundable claims: ~3–6 months

If audited/reviewed: longer depending on complexity

11. Can startups claim SR&ED before making profits?

Yes.

Many startups benefit because SR&ED credits for CCPCs are refundable, meaning companies can receive cash refunds even if they are not profitable.

12. What are common reasons SR&ED claims are rejected?

Common issues include:

• Lack of technological uncertainty

• Insufficient documentation

• Projects classified as routine development

• Poorly written technical narratives

• Incorrect expense calculations

13. Why work with us if We're not a Legacy SR&ED Firm?

Because strong SR&ED claims are built on more than familiarity with a program. They require technical insight, strategic thinking, and the ability to understand how innovation actually happens inside a business.

Our background spans engineering, software, startups, operations, and commercialization. We understand technical uncertainty, iterative development, and the realities of building under pressure. That allows us to work closely with founders and technical teams to identify eligible work, build credible documentation, and support claims with clarity and discipline.

We bring an engineering-first, founder-friendly approach to SR&ED—combining technical depth with practical execution.