What are the SR&ED eligibility criteria?
o make an SR&ED claim you must file an income tax return along with the following prescribed forms:
- Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and one of the following two forms:
- Form T2 SCH 31, Investment Tax Credit – Corporations; or
- Form T2038 (IND), Investment Tax Credits (Individuals).
- Form T2 SCH 31, Investment Tax Credit – Corporations; or
For more information on making an SR&ED claim, please see the T4088 Guide to Form T661 – Scientific Research and Experimental Development (SR&ED) Expenditures Claim.
You must file the applicable prescribed forms by your reporting deadline. The reporting deadline for corporations is 18 months (17.5 months for individuals) from the end of the tax year in which you incurred the expenditures.
Generally speaking, there are three criteria for eligibility for the SR&ED program. They are: Technical Uncertainty, Technical Advancement and Technical Content.
Technical Uncertainty assumes existence of an obstacle that requires development of a brand new solution in order to overcome it. In order to qualify for the SR&ED program, the developed solution must reach beyond the existing knowledge and remove the technical uncertainty.
The second criterion is Technical Advancement. To put it simply, this affirms that the technical uncertainty has been solved through advancing the knowledge and understanding of various technologies.
Finally, Technical Content, also known as Systematic Investigation, must demonstrate that some sort of scientific process was implemented into the solution of technical uncertainty.
The process is straight forward in practice. Having set the final objective, you apply technological experimentation in order to reach your goal. In the end, you must come away from it with more knowledge and understanding than you had before.
In order for a project to qualify under the SR&ED program it must meet the following three criteria: • Scientific or technological advancement – The work must generate information that advances the understanding of scientific relations or technologies. • Scientific or technological uncertainty – Whether a given result or objective can be achieved, or how to achieve it, is unknown or cannot be determined based on generally available scientific or technological knowledge or experience. • Scientific and technical content – The must be evidence that qualified personnel with relevant experience in science, technology, or engineering have conducted a systematic investigation through experiment or analysis.
