Scientific Research and Experimental Development (SR&ED) Tax Credit
SR&ED is a federal tax credit for businesses that do research and development in Canada. You claim it with your tax return, and part or all of it can come back as a refund. Most Canadian-controlled private corporations earn the higher 35% rate on spending up to a yearly limit.
Amount
35% of qualified SR&ED spending up to $6 million a year for most Canadian-controlled private corporations (tax years starting after December 15, 2024), and 15% on spending above that
Status
Year-roundClaimed each year with your tax return. For corporations, the deadline is 12 months after your T2 return is due, about 18 months after your tax year ends.
Type
Investment tax credit, partly or fully refundable
Run by
Canada Revenue Agency
Where
All of Canada
Checked on
Nov 13, 2026
Who it's for
Corporations, individuals, trusts and partners in a partnership can earn the credit
Most Canadian-controlled private corporations (CCPCs) get the 35% rate up to the limit
For tax years starting after December 15, 2024, eligible Canadian public corporations can also get 35%
Not for
Partnerships can't claim the credit directly (the partners do)
Capital spending made before December 16, 2024
What it covers
Qualified SR&ED spending, worked out on Form T661
Current spending, and capital spending made after December 15, 2024
How to apply
Describe your work and report your spending on Form T661.
Corporations work out the credit on Schedule 31 (T2SCH31).
Send both with your T2 return, or with an amended return for that year.
File by the SR&ED reporting deadline: 12 months after your T2 return is due.
Good to know
For CCPCs, the 35% credit on current spending is 100% refundable up to the limit. On capital spending it's 40% refundable.
The credit first reduces income tax owing. Any amount left over may be refunded.
For tax years starting after December 15, 2024, a CCPC's $6 million limit starts to shrink when the previous year's taxable capital employed in Canada reaches $15 million, and is gone at $75 million.
Associated corporations share one limit and split it on Schedule 49.
Most corporations must file electronically with CRA-certified tax software.
Questions
Does my business need to owe tax to benefit?
The CRA page says the credit first reduces income tax payable, then any remaining credit may be refunded. For CCPCs at the 35% rate, the credit on current spending is fully refundable up to the limit.
What's the deadline to claim?
For corporations, 12 months after your T2 return is due. The T2 is due 6 months after year end, so that's about 18 months after your tax year ends.
Did the spending limit go up?
Yes. For most CCPCs it's $3 million for tax years starting before December 16, 2024, and $6 million for tax years starting after December 15, 2024.
Digital Modernization and Adoption Plan: up to $15,000. Retail Modernization Project Grant: up to $5,000. Technology Demonstration Program: up to $50,000 (closed).
