Deep Intelligence
SR&ED Tax Credit 2026.
The Scientific Research and Experimental Development program is the largest single source of federal support for Canadian R&D.
What is SR&ED?
The SR&ED program uses tax incentives to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada. For Canadian-controlled private corporations (CCPCs), the investment tax credit (ITC) rate can be up to 35% on the first $3 million of qualified expenditures.
The 3 Criteria for Eligibility (The "Why" and "How")
- Technological Uncertainty: You attempted to achieve a technological advancement but faced uncertainties that could not be removed using standard procedures.
- Systematic Investigation: You formulated hypotheses and conducted a systematic investigation or search by experiment or analysis to overcome the uncertainty.
- Technological Advancement: The work must aim to advance the understanding of scientific relations or technologies. It doesn't have to succeed, but the attempt must generate new knowledge.
Eligible Costs
- T4 Salaries & Wages
- Subcontractor Fees (Canadian)
- Materials Consumed/Transformed
- Overhead (via Proxy Method)
Ineligible Costs
- Market Research / Sales
- Routine Quality Control
- Style changes / UI redesigns
- Capital equipment purchases