SR&ED tax credit: eligibility, rate and the records the CRA asks for

Canadian-controlled private corporations earn a 35% enhanced credit on qualifying R&D spend up to a $6 million annual expenditure limit, and 15% above it; the 35% credit on current expenditures is fully refundable. Eligible Canadian public corporations also earn 35% for tax years beginning after 15 December 2024. Other corporations earn a 15% non-refundable credit.

The credit is claimed on Form T661 and Schedule T2SCH31, alongside your corporate tax return. Eligible work has to show genuine scientific or technological uncertainty — routine engineering, bug fixes or design work without an uncertain outcome generally doesn't qualify.

• 35% for CCPCs on up to $6M of qualifying spend per year, 15% above it
• 35% also for eligible Canadian public corporations; 15% non-refundable for other corporations
• Filed via Form T661 + Form T2SCH31 with your T2 return
• The expenditure limit rose from $3M to $6M for tax years starting after 15 December 2024

SR&ED claims are reviewed against the records behind them. Contemporaneous, dated evidence — timesheets, payroll, ledger entries and invoices tied to the project — holds up far better than a reconstruction pulled together at filing time.

In practice that means: timesheets or time logs tied to the specific project, payroll records for the people who did the work, invoices and proof of payment for subcontractors and materials, and ledger entries that tie those costs to a project, not just a general expense category.

HelloBooks won't tell you whether a project is scientifically eligible — that's a technical and tax judgment call best made with your accountant. What it does is keep payroll, invoices and expenses posted and categorised as they happen, so the dated trail already exists when it's time to prepare the claim.

Full detail: see free accounting software for Canada.

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