About
MacSRED provides expert guidance to help businesses and incorporated professionals access Research and Development tax credits efficiently and accurately, ensuring claims are optimized and compliant.
Contact
We’re excited to talk with you about how your business could benefit from the Scientific Research and Experimental Development (SR&ED) program.
FAQ
What is the Scientific Research and Experimental Development (SR&ED) Program?
The Scientific Research and Experimental Development program (SR&ED or SRED, sometimes pronounced “Shred”) is a Canadian federal tax incentive administered by the Canada Revenue Agency.
It is designed to encourage Canadian businesses to perform research and development (R & D) aimed at creating new, or improving existing, products, processes, principles, methodologies, or materials.
SR&ED represents the largest single source of federal support
for industrial Research and Development.
The program is available to businesses of all sizes across
every sector of the economy.
In addition, the Ontario Research and Development Tax Credit
and other provincial programs operate alongside SR&ED
to complement the federal incentive.
But We Don’t Do Research and Development (R and D) Work?
The SR&ED program defines research and development a little differently than what most people typically think of as R and D.In this context, R & D means attempting to advance your technology through a systematic approach while addressing technical challenges.As a result, SR&ED is not limited to research-intensive industries — it can apply to any company facing technical obstacles.The program considers both publicly available information (for example, online searches) and the specific context of your business.If a solution to your technical problem cannot be found in the public domain, that is often where SR&ED-eligible work begins.Some technical challenges stem from constraints unique to your situation, such as legacy systems or equipment.Addressing these challenges in a systematic way may qualify your work for SR&ED tax credits.Please contact us to learn more.
What Type of Projects Qualify?
Any work carried out to resolve a technological challenge or uncertainty—where a solution cannot be found in the public domain (e.g., through Google searches, white papers, etc.)—may qualify, provided it is done systematically by qualified personnel (not part of a training program).This means that any time your team takes a technical risk to advance your technology—whether to meet business requirements or improve a product or process—even for marginal improvements, it could be eligible for SR&ED tax credits.To qualify under the SR&ED program, work must:• Advance understanding of scientific relations or technologies• Address scientific or technological uncertainty• Involve systematic investigation by qualified personnelWork eligible for SR&ED tax credits includes:Experimental development
Work aimed at achieving technological advancement to create new materials, devices, products, or processes, or to improve existing ones.Applied research
Work that advances scientific knowledge with a specific practical application in mind.Basic research
Work that advances scientific knowledge without a specific practical application in view.Support work
Activities in engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research; provided the work is commensurate with and directly supports eligible experimental development, applied research, or basic research.
What Are the Qualification Criteria?
The three primary criteria for determining whether work is eligible for SR&ED are:Technological Advancement
Experimental development work must generate knowledge that advances your understanding of the underlying technologies.
In a business context, this means that when a new or improved material, device, product, or process is developed, it must reflect a technological advancement to qualify.
In other words, the work should aim to increase the technology base or elevate the level from where it was at the start of the project.Technological Uncertainty
Technological obstacles or uncertainties are problems or unknowns that cannot be resolved using techniques, procedures, or data that are generally accessible to competent professionals in the field.Technical Content
A systematic investigation involves moving from the identification and articulation of scientific or technological obstacles, to hypothesis formulation, testing through experimentation or analysis, and finally to logical conclusions.
In a business setting, this means the objectives of the research or experimental development work must be clearly defined early in the project, and the method for addressing the obstacles or uncertainties through experimentation or analysis must be explicitly laid out.
What Kind of Expenditures Qualify?
A variety of expenditures may qualify as SR&ED-eligible, including:• Salaries for personnel directly engaged in SR&ED-eligible work• Subcontractor costs for work directly related to SR&ED activities• Material costs necessary to achieve your technological advancements• Overhead costs for office expenses and miscellaneous overhead
(typically calculated at a standard 55% of salaries)
How Much Money Can I Expect?
Federal SR&ED Investment Tax Credit
A 15% federal tax credit is available for all qualifying Research and Development expenses for eligible activities conducted in Canada.
For small Canadian-controlled private corporations, the credit rate increases to 35% on expenditures up to $3 million per year. This 35% credit is fully refundable.Provincial SR&ED Incentives
Provincial tax credits vary by jurisdiction, ranging from 4.5% to 37.5%.
What Is The Process To Submit a SRED claim?
The process for submitting a SR&ED claim with support from external consultants typically includes:• Initial informal assessment to determine whether your projects may qualify for SR&ED.• Interviews to identify projects that meet CRA eligibility criteria.• Data collection for SR&ED reports, conducted via phone calls and email communication.• Preparation of a technical SR&ED report summarizing how your claim meets eligibility requirements.
A draft is reviewed by your company for accuracy.
Revisions are made based on your feedback• Coordination with your accountant to identify project-related costs
(e.g., reviewing your T2 Corporate Tax Return and financial information)• Completion of all prescribed CRA forms required for a successful SR&ED claim• Submission of the SR&ED claim to the CRA and monitoring for acceptance• Payment of success fees to the consultant only after the SR&ED claim is accepted; if the claim is unsuccessful, no fees are dueGenerally, approximately 75% of SR&ED claims are accepted without further inquiry by the CRA.Occasionally, there may be a call with the CRA, such as with the First-Time Claimant Advisory Services team, to discuss your report. If this occurs, our team will join you on the call to assist with CRA communication.Please contact us to learn more.
How Does MacSRED’s Success-Based Fee Work?
We operate on a success-based model — our fee is only due once your SR&ED credit is approved. Typical engagements range from 15–30% of the approved credit, depending on the depending on the scale of your claim and the level of support required. All terms are agreed upon in writing before any work begins.
Updates and Charitable
We’re actively developing new charitable partnerships and exploring meaningful ways to contribute within our community. We welcome referrals and recommendations for charitable organizations that align with our values and mission, and we look forward to connecting with those making a difference.
Our Experience
MacSRED was founded on a simple principle: successful SR&ED claims come from clarity, diligence, and defensible evidence.MacSRED operates independently of accounting firms while collaborating with client CPAs to ensure compliance and consistency in financial reporting. Our leadership team includes contributors with prior experience preparing claims at established SR&ED consultancies and in-house R&D roles. We bring years of direct experience in SR&ED claim preparation across diverse industries, with projects ranging from software automation and process engineering to advanced materials and electronics.Our technical analysis framework was developed in collaboration with senior practitioners, drawing on a broad portfolio of successfully accepted claims before CRA. Through our advisory network, we work with professionals who maintain active industry roles under confidentiality agreements, allowing us to integrate current best practices while respecting professional boundaries.This collective experience enables us to deliver well-substantiated narratives and responsive support throughout every stage of the SR&ED process. We help clients implement documentation strategies that keep claim preparation efficient and audit-ready, including guidance through CRA reviews or audit requests.We work collaboratively, ensuring clients retain ownership of their internal documentation while we focus on claim eligibility, technical substantiation, and narrative clarity.
