Maximize Your SR&ED
Tax Credits

The Scientific Research and Experimental Development (SR&ED) program is Canada's largest federal tax incentive, providing businesses with tax credits and deductions for eligible R&D activities. It is administered by the Canada Revenue Agency (CRA) and available to Canadian-controlled private corporations (CCPCs), public companies, and individuals.

Canadian-controlled private corporations (CCPCs) can receive an Investment Tax Credit (ITC) of up to 35% on the first $3 million of qualifying SR&ED expenditures, and 15% on amounts above that. Public companies and other entities receive a 15% non-refundable ITC. Many provinces also offer additional credits on top of the federal amount.

Eligible work must meet three criteria: (1) there must be a scientific or technological uncertainty that cannot be resolved through routine engineering or practice; (2) a systematic investigation must be undertaken — a plan, experiment, or analysis — to resolve that uncertainty; and (3) the work must be conducted to advance scientific knowledge or achieve a technological advancement. Software development, product R&D, manufacturing process improvements, and engineering challenges commonly qualify.

Possibly, yes. Software development that involves overcoming technological uncertainty — such as developing novel algorithms, solving architectural challenges without established solutions, or advancing the state of the art — can qualify. Routine application development or customization generally does not. We can assess your specific activities during a free consultation.

Eligible SR&ED expenditures include: salaries and wages of employees directly engaged in SR&ED, 80% of contractor payments for SR&ED work, materials consumed or transformed in SR&ED, and a portion of overhead expenses. Capital expenditures are no longer eligible under the current program.

You can file an SR&ED claim up to 18 months after the end of your fiscal year. For example, if your fiscal year ended December 31, 2024, you have until June 30, 2026 to file an SR&ED claim for that year.

CRA audits a portion of SR&ED claims each year. If your claim is selected, a CRA reviewer will request supporting documentation and may conduct interviews with your technical staff. With proper documentation prepared upfront, an audit is manageable. If your claim is selected for review, SoftInventors will support you through the entire process.

We offer flexible engagement models depending on your needs and preference. This includes fixed-fee arrangements for straightforward claims, hourly consulting for specific aspects of your claim, and contingency-based fees where our compensation is a percentage of the refund you receive. We discuss all options transparently during our initial consultation.

Yes. SR&ED eligibility is not dependent on profitability or revenue. Startups and early-stage companies conducting eligible R&D are fully entitled to claim. Critically, Canadian-controlled private corporations (CCPCs) receive a refundable Investment Tax Credit — meaning you can receive a cash refund even if you owe no corporate income tax. This makes SR&ED especially valuable for startups that are not yet profitable.

CRA expects contemporaneous documentation — records created at the time the work is performed, not reconstructed after the fact. This includes project plans, meeting notes, test logs and results, source code version history, time-tracking records, and any records of hypotheses tested and conclusions reached. SoftInventors helps clients establish practical documentation habits throughout the year to minimize the burden at claim time.

A technological uncertainty exists when you cannot determine, using currently available scientific or engineering knowledge, whether a particular outcome is achievable or how to achieve it. It is not simply commercial uncertainty (e.g., "will customers buy this?") or project risk. The uncertainty must be technical in nature — for example, whether a specific algorithm can meet a performance target, or whether a material will behave as needed under certain conditions.

Government assistance — including grants, forgivable loans, and certain subsidies — generally reduces your eligible SR&ED expenditure base dollar-for-dollar. This is called the "government assistance reduction." However, the specific impact depends on the type of funding, when it was received, and how it was applied. SoftInventors analyzes your full funding picture to model the net benefit and help you sequence and structure claims optimally.

Yes, with conditions. Payments to arm's-length Canadian contractors who perform SR&ED work on your behalf are eligible at 80% of the cost under the traditional method. Non-arm's-length payments (e.g., to a related company) have different rules and require careful analysis. Foreign contractor payments are generally not eligible. We assess your contractor relationships and contracts to maximize what you can claim.

Bill C-15 (passed March 2026) introduces three major changes. First, the enhanced expenditure limit for CCPCs doubles from $3M to $6M — meaning the 35% refundable ITC rate now applies to up to $6M of qualifying expenditures, raising the maximum refundable credit from roughly $1.05M to $2.1M. Second, capital expenditures (equipment, machinery, and tangible property used in SR&ED) are once again eligible after being removed from the program in 2014. Third, a new CRA Pre-Claim Approval Process lets businesses seek advance confirmation of eligibility before filing, significantly reducing audit risk. Contact SoftInventors to assess how these changes affect your current and future claims.