Key Things to Consider When Filing SR&ED Claims
Filing a Scientific Research & Experimental Development (SR&ED) claim in Canada can be a game-changer for your business. With the potential to recover up to 64% of qualifying R&D expenses, it’s one of the most generous tax incentives available to Canadian innovators.
But here's the catch: the claims process is complex, technical, and highly scrutinized by the CRA. Whether you're filing for the first time or refining a previous submission, here are the key things to consider before you submit that T661.
✅ 1. Is Your Work Actually SR&ED?
Many businesses mistakenly believe their product development counts — but CRA’s definition is very specific.
Your work must:
Seek technological advancement
Address scientific uncertainty
Use a systematic investigation or experimentation process
Just writing code or improving a UI doesn’t qualify. But solving a problem no known solution exists for? That’s where SR&ED begins.
🧾 2. Documentation Isn’t Optional
The CRA expects more than just your word.
You’ll need to maintain:
Time tracking for each employee involved in eligible activities
Technical project documentation
Experimentation records, tests, prototypes
Invoices for materials, subcontractors, and overhead
If you’re scrambling to recreate this at year-end, your claim may be rejected or reduced. A CPA can help you systematize your tracking in real time.
📄 3. You Must File a T661 — Accurately
The T661 is the cornerstone of your SR&ED claim. It includes:
A technical narrative
Financial breakdowns
Identification of eligible activities, staff, and expenses
One small error or vague explanation can delay your refund or trigger an audit.
💡 4. Your Corporate Tax Filing Must Align
Your SR&ED claim is tied directly to your T2 corporate return. That means:
Your net income, payroll, and R&D expenses must align
Any government assistance must be reported
Improper allocation can reduce your credit or create CRA pushback
A CPA who handles both your T2 and SR&ED ensures that all the pieces line up — and that you're maximizing your return.
🛡️ 5. Be Audit-Ready from Day One
CRA reviews are getting stricter. If you’re selected for an audit:
You’ll need to produce detailed documentation fast
Your technical and financial narratives will be scrutinized
Lack of evidence can result in a denied claim — or worse, penalties
Working with a CPA who understands the audit landscape ensures you’re never caught off guard.
👩💼 6. Not All SR&ED Help Is Equal
Many consultants focus solely on the technical side or charge a hefty percentage of your refund. At Lashley CPA PC, we offer:
Flat-fee or success-based options
End-to-end filing, including technical write-up and T661
Tax integration, so SR&ED fits into your bigger financial picture
Audit support, so you’re never on your own
📞 Ready to File With Confidence?
We help founders, engineers, and financial controllers take the guesswork out of SR&ED. Whether you're building software, prototyping hardware, or advancing tech in your industry — we can help.
👉 Book a Free Consultation
Let’s make sure your innovation gets the credit it deserves.