A practical guide to SR&ED eligibility

Start with the technical problem, not the project label

SR&ED eligibility is based on the work performed and the technological knowledge available to the team. Software, manufacturing, engineering and scientific projects can all contain eligible work, but the industry or job title does not decide the result.

A useful screening question is whether a competent professional could solve the problem using established practice. If the answer was not readily available and the team had to test possible approaches, the project may deserve a closer review.

The three ideas to document

Strong project records connect the uncertainty to the work and then to the knowledge gained.

• Technological uncertainty: what could not be determined using standard practice at the outset.
• Systematic investigation: the hypotheses, tests, observations and iterations used to address that uncertainty.
• Technological advancement: the new capability or knowledge the team sought, including learning from failed approaches.

What usually falls outside the eligible core

Routine implementation, market research, styling, ordinary bug fixes and work performed after the technological uncertainty was resolved may sit outside the eligible experimental work. Separating these activities makes the claim easier to understand and defend.

A sensible next step

List the projects that required the most technical experimentation, identify the people who made the technical decisions and gather records created while the work was happening. A focused eligibility discussion can then test the facts before extensive preparation begins.