Blog

<h3><strong>Overview</strong></h3><p>The Scientific Research and Experimental Development (SR&amp;ED) Tax Incentive Program is one of the most generous R&amp;D support programs in the world. It is designed to reward Canadian companies that invest in innovation. Administered by the Canada Revenue Agency (CRA), the program distributes approximately $2 billion annually in refundable and non-refundable tax credits.&nbsp;</p><figure id="figure-gplnt9aiuhmcc0eqoz"><img id="gplnt9aiuhmcc0eqoz" src="https://media.gettyimages.com/id/2073485467/photo/brainstorm-business-meeting-to-discuss-analysis-of-financial-figures-graphs-and-growth-charts.jpg?b=1&amp;s=2048x2048&amp;w=0&amp;k=20&amp;c=wEx3fsFc44sqVhfIJizJyKBO2PDmc6GQr-_yGvvWXCc=" alt="Brainstorm business meeting to discuss analysis of financial figures, graphs and growth charts of business investments to plan new business projects." title="Brainstorm business meeting to discuss analysis of financial figures, graphs and growth charts of business investments to plan new business projects." class="object-cover bg-gray-100 rounded-lg md:rounded-xl lg:rounded-2xl" style="aspect-ratio: 16/9; object-position: center center;" data-corners="default" data-aspect="16:9" data-caption="" data-positionx="null" data-positiony="null" data-fullwidth="false" data-mce-src="https://media.gettyimages.com/id/2073485467/photo/brainstorm-business-meeting-to-discuss-analysis-of-financial-figures-graphs-and-growth-charts.jpg?b=1&amp;s=2048x2048&amp;w=0&amp;k=20&amp;c=wEx3fsFc44sqVhfIJizJyKBO2PDmc6GQr-_yGvvWXCc=" data-mce-style="aspect-ratio: 16/9; object-position: center center;"></figure><p>Despite the program’s scale, a significant portion of eligible funding goes unclaimed each year. This is often due to a lack of awareness or incorrect assumptions about what qualifies. Many businesses believe the program applies only to academic research or laboratory science. In reality, most of the funding supports experimental development, including commercial product and process improvements.</p><p>If your company is developing new technologies, refining internal systems, or solving technical challenges, you may already be conducting eligible SR&amp;ED activities, regardless of whether you’ve previously filed a claim.</p><h3><strong>Program Eligibility</strong><br><strong>Could Your Work Qualify for SR&amp;ED?</strong></h3><p>At its core, the SR&amp;ED program rewards businesses that are developing or improving a product, process, or technology. However, eligibility is determined by more than just innovation. The key consideration is whether the work involved technological uncertainty.</p><p>To assess this, we examine the technical barriers your team faced in reaching its goals. Ask yourself:</p><ul><li><em>Were you attempting to create a new technology that does not currently exist? (e.g., autonomous flying vehicles, novel AI models, proprietary materials)</em></li><li><em>Were you pushing the boundaries of an existing technology?</em><br><em>(e.g., adapting desktop software for mobile architecture, processing materials beyond their thermal limits)</em></li><li><em>Were you applying a technology in a way it was not originally intended to be used? (e.g., reconfiguring machinery, repurposing engines for alternate fuels)</em></li></ul><p>If your project required experimentation, iteration, or technical problem-solving to overcome these kinds of challenges, it may qualify for SR&amp;ED.</p><table border="1" data-mce-style="border-collapse: collapse; width: 100%; margin-left: auto; margin-right: auto;" style="border-collapse: collapse; width: 100%; margin-left: auto; margin-right: auto;" data-mce-selected="1"><tbody><tr><td style="width: 10%; border-color: rgb(20, 53, 36); border-style: solid; height: 100%;" data-mce-style="width: 10%; border-color: #143524; border-style: solid; height: 100%;"><strong>Value of Retuns</strong></td><td style="width: 10%; border-color: rgb(20, 53, 36); border-style: solid; height: 100%;" data-mce-style="width: 10%; border-color: #143524; border-style: solid; height: 100%;"><strong>Filling Dates</strong></td><td style="width: 10%; border-color: rgb(20, 53, 36); border-style: solid; height: 100%;" data-mce-style="width: 10%; border-color: #143524; border-style: solid; height: 100%;"><strong>Claim Audits</strong></td></tr><tr><td style="border-color: rgb(20, 53, 36); border-style: solid; width: 10%; height: 100%;" data-mce-style="border-color: #143524; border-style: solid; width: 10%; height: 100%;"><p>Most SR&amp;ED refunds are received within six months of filing. Bailey.LLP helps you file early and accurately, maximizing your refund and accelerating access to capital you can reinvest into growth. Typical claim deadlines fall six months after your fiscal year-end.</p></td><td style="width: 10%; border-color: rgb(20, 53, 36); border-style: solid; height: 100%;" data-mce-style="width: 10%; border-color: #143524; border-style: solid; height: 100%;">CRA audit rates have increased dramatically, now over 25x higher than a decade ago. At Bailey.LLP, we prepare defensible claims that reduce audit risk and stand up to scrutiny, ensuring you file on time and with confidence.</td><td style="width: 10%; border-color: rgb(20, 53, 36); border-style: solid; height: 100%;" data-mce-style="width: 10%; border-color: #143524; border-style: solid; height: 100%;">SR&amp;ED claims are typically filed six months after year-end—June 30 for most companies. However, CRA allows retroactive filings up to 18 months post year-end. Bailey.LLP ensures your claims are accurate, timely, and audit-ready.</td></tr></tbody></table>

SR&ED Basics