CPA-led Scientific Research and Experimental Development (SR&ED) tax credit claim preparation — technical narrative, financial schedules, and CRA review support for eligible businesses in Toronto.
The SR&ED program is Canada's largest federal tax incentive — a refundable investment tax credit for businesses that conduct scientific research or experimental development in Canada. For eligible Canadian-controlled private corporations (CCPCs), the credit is 35% on the first $3 million of qualified expenditures, and refundable — meaning it is paid out even if the corporation has no tax owing.
The eligibility criteria are specific: scientific or technological advancement, scientific or technological uncertainty, and systematic investigation. Routine engineering, standard software development, and market research do not qualify. The 18-month filing deadline is absolute — there is no mechanism to file a late SR&ED claim.
On first $3M of qualified expenditures. Prior year taxable income < $500K, taxable capital < $10M.
On qualified expenditures above the $3M threshold.
On all qualified SR&ED expenditures.
The SR&ED claim must be filed within 18 months of the end of the taxation year in which the SR&ED was performed. This is an absolute deadline — the CRA has no discretion to accept late-filed claims. A missed deadline means the credit is permanently lost.
The technical narrative must describe the scientific or technological advancement sought, the uncertainty encountered, and the systematic investigation conducted. A weak or generic narrative is the most common reason for CRA disallowance. The narrative must be specific to the project and supported by contemporaneous documentation.
SR&ED expenditure claims must be supported by documentation that ties the claimed amounts to the eligible work — timesheets, payroll records, materials invoices, and contractor agreements. Unsupported expenditures are disallowed on audit, and the resulting reassessment includes interest from the original filing date.
Companies developing new software capabilities, algorithms, or technical solutions that involve technological uncertainty — not routine programming or the application of existing techniques.
Companies developing new products, processes, or materials that involve scientific or technological advancement and uncertainty — including prototype development, process optimization, and materials testing.
Companies conducting clinical research, drug development, or medical device development that involves systematic investigation and scientific uncertainty.
Early-stage companies with significant R&D expenditures and limited tax payable — the refundable nature of the enhanced CCPC credit makes SR&ED a critical cash flow source for eligible startups.
Companies that have conducted eligible SR&ED in prior years but have not claimed the credit — the 18-month deadline applies to each taxation year, and prior year claims may still be available.
Companies whose SR&ED claims have been selected for CRA financial or technical review — TYM manages the response and supports the claim through the review process.
TYM assesses the technical eligibility of the claimed work against the SR&ED criteria — scientific or technological advancement, uncertainty, and systematic investigation. Projects that do not meet the criteria are identified before the claim is filed, reducing the risk of CRA disallowance.
TYM prepares the technical narrative for each SR&ED project — describing the advancement sought, the uncertainty encountered, the hypothesis tested, the experiments conducted, and the results obtained. The narrative is specific to the project and supported by contemporaneous documentation.
TYM prepares the SR&ED financial schedules — T661 (SR&ED Expenditures Claim) and Schedule 31 (Investment Tax Credit) — with a full reconciliation of eligible expenditures to payroll records, materials invoices, and contractor agreements. The proxy method or traditional method is selected based on the facts.
If the CRA selects the SR&ED claim for financial or technical review, TYM manages the response — providing the technical narrative, expenditure documentation, and contemporaneous records to support the claim through the review process.
TYM reviews the R&D activities and assesses technical eligibility against the SR&ED criteria. Projects that do not meet the criteria are identified before the claim is filed.
TYM reviews contemporaneous documentation — project records, lab notebooks, design documents, test results — and identifies gaps that need to be addressed before the claim is filed.
TYM prepares the technical narrative for each eligible project and the SR&ED financial schedules — T661 and Schedule 31 — with a full expenditure reconciliation.
The completed SR&ED claim and return support file are provided to the client for review. After approval, the claim is filed as part of the T2 corporate income tax return.
If the CRA selects the claim for financial or technical review, TYM manages the response and supports the claim through the review process.
TYM Business Consulting provides SR&ED tax credit claim preparation services in Toronto for technology companies, manufacturers, life sciences businesses, and startups across the Greater Toronto Area — including North York, Mississauga, Vaughan, Markham, Oakville, and Brampton.
A missed SR&ED filing deadline means the credit is permanently lost — there is no mechanism to file late. If the deadline for a prior year is approaching, the time to act is now.
Schedule an SR&ED ConsultationThe content on this page is for informational purposes only and does not constitute professional tax or legal advice. Tax rules change frequently. Consult a qualified CPA or tax advisor for guidance specific to your situation.