SR&ED Frequently Asked Questions

You can claim refunds for salaries, contracts, payments to research institutes, materials, capital expenditures, and overhead expenses directly related to eligible SR&ED projects. This includes employee wages for R&D work, subcontractor costs (80% eligible), consumable materials, and overhead expenses using the proxy method (55% of salaries).

The most challenging aspect is typically gathering and organizing contemporaneous documentation that meets CRA requirements. Many businesses struggle with technical narratives that clearly demonstrate technological uncertainty and advancement. That’s where our expertise comes in – we help you identify, document, and present your eligible work in a way that satisfies CRA requirements.

We help you implement our SR&ED tracking system (part of the SmartKit), to make next year’s claim even easier. This system helps you document R&D activities as they occur, track eligible expenses in real-time, and maintain CRA-compliant records throughout the year, reducing preparation time by up to 40%.

The SR&ED program is Canada’s largest source of federal government support for industrial R&D, providing over $3-4 billion annually in tax credits to more than 20,000 claimants. It’s one of the most generous R&D tax incentive programs in the world, offering up to 35% refundable tax credits for eligible Canadian-controlled private corporations.

We work with innovative companies across various sectors including software development, manufacturing, medical technology, food & beverage, and engineering. Our clients range from startups to established SMEs with annual revenues from $500K to $80M+. The common thread is they’re all pushing technological boundaries in their industries.

Many businesses underestimate the documentation requirements and technical writing needed. Common challenges include: difficulty articulating technological uncertainties, lack of contemporaneous documentation, confusion about eligible vs. routine work, time constraints during busy periods, and fear of audit consequences. Our streamlined process eliminates these bottlenecks.

The main reasons for claim failures include: 1) Insufficient technical documentation showing systematic investigation, 2) Claiming routine engineering or standard practice work, 3) Poor articulation of technological uncertainties and advancements, 4) Missing or inadequate supporting evidence, 5) Incorrectly allocated expenses, and 6) Filing after the 18-month deadline.

We offer three transparent pricing options to suit different business needs: 1) Success-based fees where you only pay when you receive your refund (typically 15-25% of the credit), 2) Flat-rate fees for predictable budgeting, and 3) Hybrid models combining a reduced flat fee with a smaller success component. All options include audit defense.

Using arbitrary percentages (like ‘30% of development time was SR&ED’) lacks the precision CRA requires and often triggers audits. The CRA expects detailed, project-specific tracking that shows exactly which activities involved technological uncertainty. Our SmartKit system helps you track actual SR&ED time and activities, providing defensible documentation.

You can book a free 30-minute assessment immediately to review your eligibility and plan your claim strategy. We can begin working on your claim within 48 hours of engagement. For best results, we recommend starting at least 2-3 months before your fiscal year-end.

Once your claim is filed with your corporate tax return, refundable credits typically arrive within 60-120 days. Non-refundable credits are applied immediately to reduce taxes payable. Claims filed within 6 months of year-end are processed 50% faster than those filed later.

Don’t worry – we can help reconstruct your SR&ED activities using existing documentation like emails, project files, version control logs, meeting notes, and technical specifications. While contemporaneous documentation is ideal, we’re experts at building strong claims from available evidence.

Yes! You can claim SR&ED credits for the current fiscal year and up to 18 months after your fiscal year-end. We can help you recover credits from up to two previous years if you haven’t claimed before. Many clients recover $100,000+ in missed credits from prior years.

Projects that seek technological advancement through systematic investigation qualify. This includes developing new products, processes, or materials; improving existing technologies beyond industry standard practice; and resolving technological uncertainties where solutions aren’t readily available. Software development, manufacturing improvements, and product formulation often qualify.

No! SR&ED rewards the attempt to advance technology, not commercial success. Failed projects that involved systematic investigation of technological uncertainties are fully eligible. In fact, failures often provide the best evidence of technological uncertainty.

Absolutely! Software projects involving technological uncertainty qualify. This includes developing new algorithms, overcoming system constraints, creating novel architectures, or pushing beyond current technological capabilities. Routine coding, bug fixes, and cosmetic changes don’t qualify.

Government grants and assistance reduce your eligible SR&ED expenditures but don’t disqualify you. You can still claim SR&ED on expenses not covered by grants. We help you properly allocate assistance to maximize your remaining claim.

With Engineva, you’re fully protected. We prepare audit-ready claims with comprehensive documentation. If selected for review, we handle all CRA communications, prepare responses, attend meetings, and defend your claim. Our audit defense is included in all service packages.

Approximately 15-20% of claims undergo some form of review. First-time claimants and claims over certain thresholds have higher review rates. However, well-documented claims prepared by experts like Engineva have much higher success rates in reviews.

CRA scientific advisors assess whether work meets SR&ED criteria: technological uncertainty, advancement, and systematic investigation. Financial reviewers verify expense eligibility and allocation. They examine technical documentation, project evidence, and financial records. Our claims are structured to satisfy all review requirements.