SR&ED: Up to 35% of R&D Costs Back as Cash, Now on $6M of Spending
Research and development is expensive, and the work often runs for a long time before it produces revenue. SR&ED, the Scientific Research and Experimental Development program, is Canada's largest innovation incentive, and it returns part of those costs to your company.
For Canadian-controlled private corporations (CCPCs), it is a fully refundable tax credit of up to 35% of eligible R&D expenditures, paid as cash, with a maximum annual refund of $2.1M. The program is open, and there is no application deadline: claims are filed with your T2 return.
What is SR&ED?
SR&ED is a federal tax credit for corporations that conduct eligible R&D in Canada. Rather than a grant you apply for in advance, it is claimed through your corporate tax return after the work is done.
The credit covers salaries, materials, overhead and capital equipment. Budget 2025 doubled the expenditure limit to $6M (from $3M), and public corporations are newly eligible. Royal Assent was granted March 26, 2026.
SR&ED at a glance
| Detail | SR&ED — Scientific Research & Experimental Development |
|---|---|
| Funding amount | $25K – $2.1M |
| Program type | Tax Credit |
| Level | Federal |
| Where it applies | Canada-wide |
| Status | Open |
| Deadline | No fixed deadline — file your SR&ED claim (Form T661) within 18 months of the end of the fiscal year in which the R&D was performed. |
| What it funds | R&D / Proof of Concept, Prototype / Product Development, AI Adoption / Integration |
| Industries | All sectors, including Software & IT, ECE, Advanced Manufacturing, Clean Tech, Medical Devices, Biotech & Agriculture, Material Science, Life Sciences, Equipment Manufacturing, Aerospace, Oil Gas Chemicals, Plastics Moulds Rubber, Waste Management, Digital Media & Entertainment, Automotive, Food & Beverages |
| Company stage | Startup, Growth, Expansion, Established |
| Payment model | Tax Offset |
| Matching funds required | No |
| Competition level | Low |
How much funding is available?
For CCPCs, the credit is 35% refundable on the first $6M of qualified expenditures. Budget 2025 doubled this limit from $3M, which raised the maximum annual refund for CCPCs to $2.1M, up from $1.05M.
The rate depends on the type of corporation. Eligible Canadian public corporations now also access the 35% enhanced rate, while large corporations receive a 15% non-refundable credit.
- CCPCs: 35% refundable on the first $6M of qualified expenditures (Budget 2025 doubled this from $3M).
- Maximum annual refund for CCPCs: $2.1M (up from $1.05M).
- Eligible Canadian public corporations (ECPCs): now also access the 35% enhanced rate.
- Large corporations: 15% non-refundable credit.
Who is eligible?
The corporation
- Your company must be a corporation conducting eligible R&D in Canada.
- CCPCs receive the 35% refundable rate on the first $6M of qualified expenditures, with a maximum annual refund of $2.1M.
- Eligible Canadian public corporations (ECPCs) now also access the 35% enhanced rate.
- Large corporations receive a 15% non-refundable credit.
The work
- The work must involve technological uncertainty. Routine development does not qualify.
- Capital equipment is re-eligible as of December 16, 2024.
The claim
- File Form T661 within 18 months of the end of the fiscal year in which the R&D was performed.
When and how to apply
SR&ED is open, and there is no fixed application deadline. Your company files its SR&ED claim (Form T661) with its T2 return, within 18 months of the end of the fiscal year in which the R&D was performed.
The status of SR&ED — Scientific Research & Experimental Development in EVAMAX Grant AI™ is currently Open. Grant AI™ re-checks it against the official program page, so look there for the latest before you start an application.
Is SR&ED right for you?
SR&ED suits corporations doing R&D in Canada that involves real technological uncertainty, across a wide range of industries and at every stage from startup to established company. CCPCs gain the most, with a refundable 35% rate and a maximum annual refund of $2.1M, while large corporations receive a 15% non-refundable credit. Watch the 18-month filing window after each fiscal year-end, and make sure the work you claim goes beyond routine development.
Next steps: look up SR&ED — Scientific Research & Experimental Development in EVAMAX Grant AI™ to see its live status and other programs that fit your company, or talk to EVAMAX about building your application.
Program details are from the EVAMAX Grant AI™ record as of October 8, 2026. Programs change — confirm current terms on the official program page before you apply.