Scientific Research and Experimental Development (SR&ED)
Federal R&D tax credit returning up to 35% refundable to small Canadian-controlled private corporations performing eligible R&D in Canada.
About this program
The federal SR&ED program is Canada's largest single source of business R&D support. CCPCs receive a 35% refundable Investment Tax Credit on the first $4.5 million of qualified SR&ED expenditures (raised from $3 million in Budget 2025 to $6 million effective dates). Above that limit, the credit drops to 15% (partially refundable for CCPCs). Public corporations and foreign-controlled businesses receive 15% non-refundable. Eligible work includes software, hardware, manufacturing process, life sciences, and engineering R&D. Stacks with the Ontario Innovation Tax Credit for Ontario CCPCs.
Eligibility
Canadian businesses (CCPCs, public corporations, partnerships, sole proprietors) performing SR&ED work in Canada. Must meet SR&ED definition: technological advancement, technical uncertainty, and systematic investigation.
Requirements
- Identify SR&ED-eligible projects throughout the fiscal year
- Document technical evidence: hypotheses, experiments, results, technical reports
- Prepare Form T661 (SR&ED Expenditures Claim) and Schedule T2SCH31