Doing an SR&ED Claim Yourself or With an Advisor

You can prepare an SR&ED claim without a consultant, and the CRA gives you the forms and guides to do it. Deciding if you should is a different matter. It depends on how large the claim is, how clear the technical story is and how much time your team can spare. This article lays out what a claim demands so you can judge where outside help earns its keep.

No fee figures appear below, because the CRA does not set what advisors charge and a number without a source would be a guess.

What a claim asks of you

A claim is two pieces of work joined together. One is a technical story about what your team tried to learn, and the other is a calculation of what that effort cost. Different CRA staff usually review each half.

The technical side is judged against three tests. The work must aim at scientific or technological advancement. It must face uncertainty that existing knowledge could not resolve. And it must be a systematic investigation by experiment or analysis. All three have to be met, and passing two is not enough.

The financial side is worked out on Form T661, the SR&ED Expenditures Claim. For a corporation the credit itself is calculated on Schedule 31 of the T2 return. Engineers know the technical story best, and someone who understands payroll knows the numbers. An owner who does both jobs can run a claim alone.

Testing your own work first

This step costs nothing and tells you a lot. Take one piece of work and ask what the team did not know at the start, what it tried and what it learned.

If the honest answer to the first is that nobody knew how long it would take, that is business risk, not the kind the program covers. If the team can list its attempts in order, the systematic investigation test is probably in reach. And a dead end can qualify, because the CRA says a project ends when new knowledge is gained whether or not the goal was reached.

If the answers keep coming back as we used a known method and it worked, the project likely belongs outside the program, and no skilled writing changes that.

Drawing project lines and writing them up

The CRA defines an SR&ED project as a set of interrelated activities that together achieve, or try to achieve, an advancement. Consider a Toronto food manufacturer developing a shelf-stable sauce. Recipe work, packaging design and a retail launch sit beside a series of stability tests. Only the experiments with real doubt about whether the product could stay stable might be SR&ED.

Part 2 of Form T661 gives each project three written answers with hard word limits. Uncertainties go on line 242, where 350 words are allowed. The work performed goes on line 244, with 700 words. Advancements fill line 246, capped at 350.

Plain writing wins. State the goal, why known methods could not reach it and what was unknown. Then walk through the year in order. A developer usually writes these best, but technical people sometimes skip reasoning a reviewer needs, and a second reader outside the team can catch those gaps.

Costing the work

The T4088 guide sets a rule for each kind of cost. Salary counts for employees directly engaged in SR&ED done in Canada, and specified employees are capped at five times the year’s maximum pensionable earnings, which is $373,000 at the 2026 figure of $74,600.

Materials count when consumed or transformed in the work. For arm’s length contractors, 80% of the payment is eligible for the ITC, and payments to non-arm’s length parties earn nothing. Overhead can be traced directly or claimed at the proxy amount, which the guide sets at 55% of the salary base.

Take $700,000 of salaries, $30,000 of materials and a $200,000 arm’s length engineering bill (80% is $160,000). Proxy overhead is 55% of $700,000, or $385,000. The base is $1,275,000, well under the $6 million limit, so at 35% the credit is $446,250. Counting the full $200,000 contract by mistake would add $14,000 of credit that a reviewer would remove.

Rates and limits

Every claimant can earn a basic 15% ITC. Canadian-controlled private corporations can earn 35% up to an expenditure limit, which is $6 million for tax years beginning after December 15, 2024 and was $3 million before. The limit shrinks for corporations with taxable capital employed in Canada between $15 million and $75 million.

For a qualifying corporation the 35% credit on current expenditures is fully refundable up to the limit. Individuals can receive 40% of the credit earned at 15% as a refund. Unused credits carry back 3 years and forward 20.

How the CRA reviews a claim

The CRA generally processes a claim within 60 calendar days of receiving the completed claim and return. A research and technology advisor checks whether the work is eligible, and a financial reviewer checks the costs. Refundable claims selected for review are generally completed within 180 calendar days, and expenditure reviews within 90.

Either reviewer can ask for supporting documents, and the company still has to explain its own work whoever prepared the claim. Ask any advisor up front whether they stay involved through a review. If you go alone, have someone ready to talk through the technical details.

Approval before you spend

Since April 1, 2026, the CRA has offered pre-claim approval to Canadian-controlled private corporations, Canadian corporations and Canadian partnerships with annual gross income under $25 million, for up to three projects. A case number arrives in two to five business days, and you upload supporting documents through My Business Account.

The CRA decides within eight weeks, and approval lasts up to three years. Approved projects that later need an expenditure review are processed in 90 days instead of 180.

Where outside help earns its keep

Paid help makes most sense when the claim is large, when the work sits in a grey area or when the structure is complicated. Partnerships carry special rules, since the whole deductible pool must be claimed in the year of the spending. Corporations near the taxable capital thresholds have limit calculations that are easy to get wrong.

Help is less useful for work you have not documented. A preparer cannot invent records. If your notes are thin, spend the next month collecting what you can from the people who did the work, including weekly time notes. A developer paid $110,000 who spent 60% of the year on the project adds $66,000 to the claim, but only if the notes back it up.

Questions to put to an advisor

If you hire, ask clear questions and get the answers in writing, since the CRA does not regulate advisor fees.

• How is the fee set, and is any of it tied to the size of the credit or the outcome of a review?
• Who will write the project descriptions, and will your technical staff be interviewed?
• Is work during a CRA review included?
• Who keeps the claim file when the job ends?

Comparing the cost of help

Suppose your estimated ITC is $100,000 and an advisor quotes 20% of the credit. That is a made-up figure to show the arithmetic and not a market rate. The fee is $20,000 and you keep $80,000. If doing it yourself takes 80 hours at an internal cost of $60 an hour, that is $4,800.

The real question is what the advisor adds, such as a stronger claim or coverage through a review. Change the inputs and the answer changes, so use written quotes. A corporation has 18 months from year-end to file, which for a December 31, 2026 year-end is June 30, 2028. The income tax calculator and the self-employed tax calculator show the personal tax side. For your own numbers, try the Marginal Tax Rate & Tax Brackets calculator, or browse the tax calculators.

Sources

• CRA: Scientific Research and Experimental Development (SR&ED) tax incentives
• CRA: T4088 Guide to Form T661
• CRA: Get an investment tax credit (ITC)
• CRA: Group work into eligible SR&ED projects
• CRA: After you claim
• CRA: How to apply for pre-claim approval

Common questions

Last reviewed: September 29, 2026. Figures come from the official sources listed above. How we check the numbers and our editorial policy.