Software SR&ED Tax Credits Ontario: How Tech Companies Can Recover Development Costs

By Bader A. Chowdry, CPA, CA, LPA | Insight Accounting CPA

Software development companies in Mississauga, the GTA, and across Ontario are sitting on significant tax recovery opportunities that many leave unclaimed. The Scientific Research and Experimental Development (SR&ED) program represents Canada’s largest federal tax incentive, designed to reward companies that push technological boundaries through innovation and research.

For software companies generating $500,000 or more in annual revenue, SR&ED credits can return 35% to 60% of eligible R&D expenditures directly to your bottom line. Yet many tech leaders either don’t realize their development work qualifies, or they’re intimidated by the complexity of the CRA’s requirements and audit process.

At Insight Accounting CPA, we’ve helped dozens of technology companies across the Greater Toronto Area maximize their SR&ED claims using our patent-pending AI governance framework to identify qualifying projects, document technical advancement, and prepare audit-ready submissions that withstand CRA scrutiny.

This comprehensive guide will walk you through everything your software company needs to know about SR&ED tax credits in Ontariofrom qualification criteria to claim preparation, common pitfalls to strategic optimization.

What Makes Software Development Qualify for SR&ED Tax Credits?

The CRA doesn’t fund routine software development. To qualify for SR&ED credits, your work must demonstrate technological uncertainty and technological advancementnot just business innovation or incremental improvements.

The Three-Part SR&ED Eligibility Test

Your software development work must satisfy three criteria:

1. Technological Uncertainty

You faced a problem where the solution wasn’t readily available through standard practice or existing knowledge. This means:

• The challenge couldn’t be resolved by skilled professionals applying routine techniques
• Existing libraries, frameworks, or documented solutions didn’t solve your specific problem
• You needed to conduct systematic investigation or experimentation to find the solution

2. Technological Advancement

Your work generated new knowledge or capabilities that represent an advancement over existing technology:

• Improved algorithms that deliver measurably better performance
• Novel architectures that enable capabilities not previously achievable
• New methods for integrating systems in ways that overcome technical barriers
• Breakthroughs in data processing, security, scalability, or efficiency

3. Systematic Investigation

You followed a structured approach involving hypothesis, experimentation, and analysis:

• Documented testing of different approaches
• Measured results and refined solutions based on findings
• Applied scientific or engineering principles to problem-solving

Examples: Qualifying vs. Non-Qualifying Software Work

QUALIFIES for SR&ED:

• Developing a machine learning model that improves fraud detection accuracy beyond existing commercial solutions through novel feature engineering and custom neural network architectures
• Creating a real-time data synchronization system that overcomes latency limitations in distributed databases serving 1M+ concurrent users
• Building a natural language processing engine with custom tokenization approaches for industry-specific terminology where existing NLP libraries fail
• Designing a new encryption method that maintains security while reducing processing overhead by 40% compared to standard implementations

DOES NOT QUALIFY for SR&ED:

• Implementing a standard e-commerce checkout flow using React and Stripe
• Building a CRM dashboard using established frameworks like Angular and Chart.js
• Migrating an application from one cloud provider to another using documented processes
• Creating a mobile app that connects to existing APIs using standard REST protocols
• Routine bug fixes, performance tuning, or user interface improvements that don’t involve technological uncertainty

The distinction comes down to this: were you solving a technological problem requiring research and experimentation, or a business problem using established technical approaches?

Eligible SR&ED Expenditures: What You Can Claim

Once you’ve identified qualifying SR&ED projects, the next step is calculating eligible expenditures. The CRA recognizes five categories of costs directly attributable to SR&ED work.

1. Salaries and Wages (Typically 60-80% of Claims)

You can claim the portion of employee compensation directly related to SR&ED activities:

• Software developers conducting experimental work
• Data scientists developing novel algorithms
• DevOps engineers solving unprecedented scalability challenges
• Technical leads supervising SR&ED projects (maximum 10% of their total compensation)

Critical documentation requirement: Time tracking. The CRA expects contemporaneous records showing the percentage of each employee’s time spent on SR&ED work. Retroactive estimates are red flags for audits.

At Insight Accounting CPA, we help clients implement time tracking systems that capture SR&ED hours without burdening development workflowsone area where our AI governance framework streamlines compliance documentation.

2. Subcontractor Costs

Third-party contractors performing SR&ED work on your behalf can be claimed at 80% of the amount paid (CCPCs) or 100% (non-CCPCs):

• Contract developers tackling specific technological challenges
• Research consultants conducting feasibility studies
• Specialist engineers solving domain-specific technical problems

Important limitation: The subcontractor cannot be related to your company, and you must have a written contract in place before work begins.

3. Materials Consumed in SR&ED

Raw materials and consumables directly used in experimentation and testing:

• Cloud computing costs for development and testing environments
• API usage fees for services used in experimental prototypes
• Data acquisition costs for training machine learning models
• Licensed software used exclusively for SR&ED projects

Exclusion: General overhead costs like office internet, standard development tools, or production infrastructure don’t qualify.

4. Capital Equipment (Limited Eligibility)

Specialized equipment purchased solely for SR&ED purposes may qualify, though this rarely applies to software companies. More relevant: depreciation on high-performance computing equipment used exclusively for R&D.

5. Overhead Proxy Method (CCPCs Only)

Canadian-Controlled Private Corporations can claim an additional 55% of salaries/wages as a proxy for overhead costs (utilities, rent, administrative support) without detailed tracking. This simplified approach significantly increases claim value for qualifying companies.

Understanding Investment Tax Credit Calculations: CCPCs vs. Non-CCPCs

The financial benefit of SR&ED claims varies significantly based on your company structure and size.

For Canadian-Controlled Private Corporations (CCPCs)

Federal Credit:

• 35% refundable ITC on first $3 million of eligible expenditures
• 15% non-refundable ITC on expenditures exceeding $3 million

The $3 million expenditure limit is reduced if:

• Prior year taxable income exceeds $500,000 (eliminated entirely at $800,000)
• Prior year taxable capital exceeds $10 million (eliminated entirely at $50 million)

Example: A Mississauga software company with $2 million in eligible SR&ED expenditures and taxable income under $500,000 would receive a refundable federal credit of $700,000 (35% $2M).

For Non-CCPCs and Foreign-Controlled Companies

• 15% non-refundable federal ITC on all eligible expenditures
• Can only offset tax payable; no refund if credit exceeds tax liability
• Credits can be carried back 3 years or forward 20 years

Ontario Innovation Tax Credits

Beyond federal SR&ED, Ontario offers additional programs for technology companies:

Ontario Innovation Tax Credit (OITC):

• 8% refundable credit on eligible SR&ED expenditures
• Available to CCPCs with Ontario permanent establishments
• Applies to same base of eligible expenditures as federal SR&ED

Ontario Interactive Digital Media Tax Credit (OIDMTC):

• 35% refundable credit on eligible labour costs
• Specifically for companies developing interactive digital media products
• Focuses on product development, not just R&D
• Cannot claim same expenditures under both OIDMTC and SR&ED

For many software companies in the GTA, the strategic decision between maximizing SR&ED claims versus OIDMTC claims requires careful analysis. Our team at Insight Accounting models both scenarios to identify the optimal approach for your specific projects and corporate structure.

Common CRA Audit Triggers and How to Prepare Bulletproof Documentation

SR&ED claims face heightened CRA scrutiny, particularly in the software sector where the line between routine development and technological advancement can be subjective. Understanding audit triggers helps you prepare defensively from the start.

Top 5 SR&ED Audit Red Flags

1. Dramatic Year-Over-Year Increases

Claiming $200,000 one year and $1.2 million the next raises questions. While legitimate, sudden increases require clear explanations of new projects or expanded R&D teams.

2. High Ratios of SR&ED to Total Development

If you’re claiming 90% of your development costs as SR&ED, the CRA will question whether routine work is being misclassified. Typical ratios range from 30-60% for legitimate tech R&D companies.

3. Vague or Business-Focused Project Descriptions

Describing projects as “improving user experience” or “increasing market competitiveness” signals business objectives, not technological advancement. Technical descriptions must focus on the technological problems and scientific uncertainties you addressed.

4. Missing or Retroactive Time Tracking

Contemporary time records are the gold standard. Emails from managers asking employees to “estimate your SR&ED time for last year” are major red flags.

5. Lack of Technical Documentation

The CRA expects evidence of systematic investigation: test results, experiment logs, code commit messages, architecture diagrams, technical specifications, and documented iterations.

Building Audit-Ready SR&ED Documentation

Your claim is only as strong as the evidence supporting it. Essential documentation includes:

Project-Level Technical Narratives

For each SR&ED project, document:

• The technological problem or uncertainty you faced
• Why existing solutions were insufficient
• The hypothesis you tested and experiments you conducted
• Technical challenges encountered and how you overcame them
• The technological advancement achieved
• How the work represents progress beyond standard practice

Contemporary Time Records

Implement tracking showing:

• Employee names and roles
• Projects worked on (SR&ED vs. non-SR&ED)
• Hours or percentage of time per project
• Recorded during the actual work period, not retroactively

Technical Evidence

Gather supporting materials like:

• Code repositories with commit histories showing experimental iterations
• Testing logs and performance benchmarks
• Architecture diagrams and design documents
• Meeting notes from technical discussions
• Research papers or technical articles consulted
• Failed approaches and why they didn’t work

This is where Insight Accounting’s AI-powered approach delivers measurable value. Our patent-pending AI governance framework automatically analyzes development workflows, extracts qualifying activities from project management systems, and flags projects exhibiting SR&ED characteristicsreducing documentation burden while improving claim accuracy and defensibility.

SR&ED vs. OIDMTC: Strategic Tax Planning for Ontario Software Companies

Many Ontario software companies qualify for multiple tax credit programs. Understanding the differences helps you maximize total tax recovery.

SR&ED: Research and Experimental Development

Focus: Technological uncertainty and advancement
Eligible costs: Salaries, contractors, materials, overhead (proxy method)
Credit rates: 35% federal (CCPCs) + 8% Ontario (OITC)
Best for: Companies pushing technological boundaries, developing novel algorithms, overcoming technical barriers

OIDMTC: Product Development for Interactive Digital Media

Focus: Developing interactive digital media products for commercial exploitation
Eligible costs: Ontario-based labour costs only
Credit rate: 35% refundable (for eligible activities up to $1M per product, phased out to $3M)
Best for: Companies developing games, educational software, interactive apps, entertainment products

Key Differences That Matter

| Factor | SR&ED | OIDMTC |

|——–|——-|——–|

| Qualifying criteria | Technological advancement through R&D | Product development (broader scope) |

| Contractor costs | Eligible at 80-100% | Not eligible |

| Materials/cloud costs | Eligible | Not eligible |

| Overhead | 55% proxy available | Not available |

| Can overlap? | Nocannot claim same costs under both | Nocannot claim same costs under both |

Strategic Optimization Approach

For software companies working on multiple projects simultaneously:

1. Categorize projects by whether they better fit SR&ED (experimental R&D) or OIDMTC (product development) criteria
2. Allocate employee time to the most advantageous program for each project
3. Maximize total credits by claiming contractors and materials under SR&ED, while shifting routine product development labour to OIDMTC where applicable
4. Model both scenarios to determine which combination yields the highest total refund

Our fractional CFO services include strategic tax credit planning that ensures your project classification and cost allocation optimize total tax recovery across all available programs.

Real-World SR&ED Examples from GTA Software Companies

Case Study 1: SaaS Platform Scalability Challenge

A Toronto-based SaaS company serving enterprise clients faced response time degradation when concurrent users exceeded 50,000. Standard database scaling approaches (read replicas, connection pooling, caching) didn’t solve the fundamental architecture limitation.

The SR&ED Work:

• Designed novel distributed caching architecture with predictive pre-loading based on usage pattern analysis
• Developed custom algorithms for query optimization that reduced database hits by 60%
• Experimented with multiple approaches to data partitioning before achieving consistent sub-100ms response times at 200,000+ concurrent users

Qualifying factors: Technological uncertainty (existing solutions inadequate), technological advancement (novel architecture achieving unprecedented performance), systematic investigation (multiple approaches tested and measured).
Result: $340,000 SR&ED claim covering 18 months of development work by 4 senior engineers.
Case Study 2: AI-Powered Document Classification

A Mississauga fintech company needed to automatically classify and extract data from thousands of unstructured financial documents with accuracy exceeding 95%a threshold existing OCR and NLP tools couldn’t reliably achieve.

The SR&ED Work:

• Developed custom training datasets with domain-specific labeling
• Experimented with multiple neural network architectures (CNN, RNN, Transformer-based) to identify optimal approach
• Created novel feature engineering techniques combining visual layout analysis with contextual language understanding
• Achieved 97.3% accuracy through iterative refinement

Qualifying factors: Technological uncertainty (commercial tools insufficient), technological advancement (novel combination of techniques achieving superior accuracy), systematic investigation (documented experimentation across architectures).
Result: $275,000 SR&ED claim including data scientist salaries, cloud computing costs for model training, and contractor costs for specialized ML expertise.
Case Study 3: Real-Time Collaboration Engine

An Ontario software company building project management tools needed real-time collaborative editing capabilities with conflict resolution for 100+ simultaneous editorsa scale where operational transformation algorithms broke down.

The SR&ED Work:

• Researched limitations of existing CRDT (Conflict-free Replicated Data Types) implementations
• Developed hybrid approach combining CRDT with custom conflict resolution logic
• Solved complex edge cases involving network partitions and out-of-order operations
• Achieved consistent state synchronization at unprecedented scale

Qualifying factors: Technological uncertainty (scale exceeded capabilities of existing algorithms), technological advancement (hybrid approach solving previously unsolved problem), systematic investigation (tested multiple CRDT variants, documented failure modes, iterated solutions).
Result: $420,000 SR&ED claim across 2 years of development.

How Insight Accounting’s AI-Powered Approach Maximizes Your SR&ED Claims

Traditional SR&ED claim preparation is labor-intensive, requiring technical staff to reconstruct months of work from memory, manually review documentation, and write detailed narrativesoften 6-12 months after the work occurred, when memories have faded and details are lost.

At Insight Accounting CPA, we’ve developed a fundamentally different approach leveraging our patent-pending AI governance framework to continuously identify, document, and substantiate SR&ED activities in real time.

Our AI-Enhanced SR&ED Process

1. Continuous Project Monitoring

Our AI framework integrates with your development workflows (GitHub, Jira, Azure DevOps, etc.) to automatically flag projects exhibiting SR&ED characteristics:

• Identification of technological uncertainty indicators in commit messages and issue descriptions
• Detection of experimental iterations and technical problem-solving patterns
• Recognition of novel approaches and technological advancement signals

2. Automated Documentation Extraction

Rather than manually reconstructing technical narratives months later, our system continuously extracts and organizes relevant evidence:

• Technical challenge descriptions from project documentation
• Experimental approaches from code repositories
• Performance testing results and benchmarks
• Failed attempts and lessons learned

3. Intelligent Time Allocation Analysis

Our AI analyzes project data to suggest defensible time allocations:

• Distinguishes SR&ED work from routine development based on activity patterns
• Identifies employees spending significant time on qualifying activities
• Flags projects requiring detailed technical narratives

4. CRA-Aligned Technical Narratives

We translate technical work into language that satisfies CRA requirements:

• Focus on technological uncertainty and advancement, not business benefits
• Structure narratives around systematic investigation and scientific methodology
• Support claims with concrete technical evidence
• Anticipate and address potential auditor questions

5. Scenario Modeling and Optimization

For companies qualifying for multiple programs (SR&ED, OIDMTC, OITC), we model different allocation strategies to maximize total refunds while maintaining audit defensibility.

The Measurable Difference

Our clients typically see:

• 25-40% higher claim values through comprehensive identification of qualifying work
• 75% reduction in documentation time for technical staff
• Faster processing with fewer CRA requests for additional information
• Higher approval rates due to audit-ready documentation

For technology companies in Mississauga and the Greater Toronto Area generating $500,000+ in annual revenue with active R&D initiatives, our approach transforms SR&ED from a retrospective paperwork burden into a strategic advantage captured in real time.

SR&ED Claim Timeline and Process

Understanding the claim process helps you plan cash flow and allocate resources appropriately.

Key Dates and Deadlines

• Claim deadline: 18 months after your tax year-end
• Processing time: 4-8 months for straightforward claims; 12-18 months if selected for technical review
• Refunds: Issued after claim approval (CCPCs with refundable credits)
• Audit window: CRA can audit claims up to 3 years after assessment

The Claim Preparation Process

Months 1-2: Project Identification and Scoping

• Identify potentially qualifying SR&ED projects
• Assess technological uncertainty and advancement for each
• Determine which projects meet the three-part eligibility test

Months 2-4: Expenditure Tracking and Documentation

• Compile time tracking records for all employees
• Gather contractor invoices and agreements
• Calculate material costs (cloud services, data, etc.)
• Assemble technical documentation and evidence

Months 4-5: Technical Narrative Development

• Write detailed project descriptions focused on technological challenges
• Document systematic investigation and experimental approaches
• Explain advancements achieved and why they represent progress beyond standard practice
• Align language with CRA expectations and technical review criteria

Month 5-6: Financial Calculation and Form Completion

• Calculate eligible expenditures by project
• Complete federal Form T661 and Schedule 31
• Complete Ontario forms for OITC if applicable
• File with corporate tax return

Post-Filing: CRA Review and Response

• Respond to any CRA requests for clarification or additional information
• Participate in technical review interviews if selected
• Negotiate claim adjustments if CRA disputes portions of claim

Working with experienced SR&ED specialists like Insight Accounting CPA throughout this process significantly improves both claim value and approval likelihood while freeing your technical team to focus on innovation rather than paperwork.

Avoiding Common SR&ED Claim Mistakes

Even companies with legitimate SR&ED work can see claims reduced or rejected due to preparation errors.

Mistake #1: Focusing on Business Benefits Instead of Technical Challenges

Wrong approach: “We developed this feature to increase customer retention and grow market share.”
Right approach: “We faced technological uncertainty in achieving sub-50ms query response times at 1M+ records using graph database structures. Standard indexing approaches failed due to the complexity of multi-hop relationship traversal. We systematically experimented with…”

The CRA doesn’t care about your business objectives. Focus exclusively on the technological problem and the scientific approach to solving it.

Mistake #2: Claiming Routine Development Work

Implementing well-documented solutions using standard tools doesn’t qualify, regardless of complexity. The question isn’t “Was this technically challenging?” but rather “Did this require experimentation to overcome technological uncertainty?”

Mistake #3: Inadequate Time Tracking

Retroactive time estimates are weak evidence. Implement contemporaneous tracking showing SR&ED vs. non-SR&ED time allocation.

Mistake #4: Vague or Jargon-Heavy Technical Descriptions

CRA reviewers need to understand both the technological challenge and why standard approaches were insufficient. Write for an intelligent technical audience that may not be expert in your specific domain.

Mistake #5: Missing Supporting Documentation

Claims supported only by narrative descriptions face higher scrutiny. Include code samples, architecture diagrams, test results, and other concrete evidence.

Mistake #6: Incorrect Expenditure Classification

Common errors include:

• Claiming production infrastructure costs (only development/testing environments qualify)
• Including non-SR&ED employee time in calculations
• Misapplying the overhead proxy method
• Claiming ineligible contractor arrangements

Mistake #7: Ignoring Provincial Programs

Ontario companies leaving OITC unclaimed forfeit an additional 8% credit on the same eligible expenditures already calculated for federal SR&ED.

Taking Action: Your Next Steps to Claim SR&ED Tax Credits

If your software company in Mississauga, Toronto, or anywhere across Ontario is pushing technological boundaries through research and development, you’re likely leaving significant tax recovery on the table.

Immediate Actions You Can Take Today

1. Conduct a SR&ED Opportunity Assessment

Review your current and recent projects against the three-part eligibility test:

• Which projects involved technological uncertainty not solvable through routine approaches?
• What technological advancements did you achieve?
• What systematic investigation and experimentation did you conduct?

2. Implement Time Tracking

If you don’t have contemporaneous time records, start tracking today for future claims. Even simple weekly estimates by project are better than retroactive reconstruction.

3. Preserve Technical Documentation

Don’t delete code repositories, experiment logs, test results, or technical design documents. These materials become critical evidence for substantiating claims.

4. Calculate Your Potential Recovery

Estimate eligible expenditures for qualifying projects:

• Employee salaries (percentage of time on SR&ED work)
• Contractor costs for technical R&D work
• Materials and cloud costs for development/testing
• Apply overhead proxy if eligible (55% of salaries)

Multiply by applicable credit rates (35% federal + 8% Ontario for CCPCs) to estimate potential refund.

5. Consult with SR&ED Specialists

Given the complexity of eligibility assessment, documentation requirements, and CRA audit considerations, working with experienced SR&ED advisors pays for itself many times over through higher claim values and reduced audit risk.

How Insight Accounting CPA Can Help

At Insight Accounting CPA, we’ve helped technology companies across the Greater Toronto Area recover millions in SR&ED tax credits through our specialized approach combining deep technical understanding, CRA compliance expertise, and patent-pending AI governance frameworks that maximize claim value while minimizing preparation burden.

Our services include:

• SR&ED Opportunity Assessments: Complimentary review of your projects to identify qualifying work and estimate potential recovery
• Claim Preparation and Filing: End-to-end service from project documentation through CRA submission
• AI-Powered Documentation: Automated extraction and organization of technical evidence from your development workflows
• Strategic Tax Credit Planning: Optimization across SR&ED, OIDMTC, and other programs to maximize total recovery
• Audit Support and Representation: Expert defense of your claims if selected for CRA technical review
• Ongoing Advisory: Proactive structuring of R&D initiatives to maximize future SR&ED eligibility

Ready to unlock your software company’s SR&ED tax recovery?

Contact Insight Accounting CPA today for a complimentary SR&ED opportunity assessment. Call (905) 270-1873 or visit our technology industry services page to learn more about how our accounting intelligence and patent-pending AI governance framework can transform your tax credit strategy.

Don’t leave hundreds of thousands of dollars in legitimate tax recovery unclaimed. Let’s identify the technological advancement you’ve already achieved and get you the credits you’ve earned.

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Frequently Asked Questions About Software SR&ED Tax Credits

Q: Can software companies really claim SR&ED tax credits, or is this program mainly for pharmaceutical and manufacturing R&D?

A: Software companies absolutely qualify for SR&ED credits, and they represent one of the largest sectors claiming the credit. The key is demonstrating that your development work involved technological uncertainty and advancement, not just routine coding. Many software projectsespecially those involving novel algorithms, unprecedented scale challenges, new architectures, or advanced AI/ML workmeet SR&ED criteria. The CRA has specific guidelines for software development that acknowledge technological advancement in areas like system architecture, algorithms, and computational methods.

Q: We use modern frameworks and cloud services for our development. Does using existing tools disqualify us from SR&ED?

A: Not at all. SR&ED isn’t about building everything from scratchit’s about solving problems where existing tools and documented approaches prove insufficient. You can absolutely use React, TensorFlow, AWS, or any other modern tools while still qualifying for SR&ED. What matters is whether you faced technological uncertainty that required experimentation to overcome. For example, using TensorFlow to build a standard image classifier doesn’t qualify, but developing novel neural network architectures or custom training approaches to achieve accuracy levels that existing models can’t reach absolutely does qualifyeven though you’re using TensorFlow as your framework.

Q: How far back can we claim SR&ED credits for work we’ve already completed?

A: You can claim SR&ED credits up to 18 months after your tax year-end. So if your company’s tax year ends December 31, 2026, you have until June 30, 2028 to file a claim for SR&ED work performed during 2026. However, claims become significantly more difficult the longer you wait because technical staff forget details, documentation gets lost, and contemporaneous time records become unavailable. The best approach is to identify and document SR&ED work during the tax year and prepare claims shortly after year-end when evidence is fresh.

Q: What happens if the CRA audits our SR&ED claim?

A: SR&ED claims face higher audit rates than standard tax returns, particularly for first-time claimants and larger claims. If selected for review, the CRA will request detailed technical documentation and may conduct interviews with your technical staff to verify that the work meets SR&ED criteria. Having thorough contemporary documentation, clear technical narratives, and substantiated time allocations is critical. Claims prepared with audit-ready documentation from the start rarely face significant adjustments. This is why working with experienced SR&ED advisorswho understand exactly what the CRA looks for during technical reviewssubstantially reduces audit risk and protects claim value.

Q: Can we claim both SR&ED and OIDMTC for the same software development project?

A: No, you cannot claim the same expenditures under both programs. However, many software companies work on multiple projects simultaneouslysome primarily involving experimental R&D (SR&ED-eligible) and others focused on product development (OIDMTC-eligible). Strategic planning involves categorizing projects and allocating employee time to the program offering the highest benefit for each type of work. Additionally, SR&ED allows claiming contractor costs and materials while OIDMTC only covers labour, so for projects with significant third-party costs, SR&ED may be more valuable even if the work could qualify under either program.

Q: Our development team doesn’t track time by project. Can we still claim SR&ED?

A: You can still claim SR&ED, but lack of contemporaneous time tracking weakens your claim and increases audit risk. The CRA strongly prefers time records created during the work period showing allocation between SR&ED and non-SR&ED activities. If you don’t have detailed tracking, you can still prepare claims using reasonable estimates based on project records, Git commits, and other supporting evidencebut these retrospective allocations face greater scrutiny during audits. Going forward, implementing even basic time tracking (weekly estimates by project) significantly strengthens future claims. Many project management tools (Jira, Asana, ClickUp) can capture this data as part of normal workflows without burdening developers.

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About Insight Accounting CPA

Insight Accounting CPA delivers Accounting Intelligence to technology companies and innovative businesses across Mississauga, Toronto, and the Greater Toronto Area. Our specialized services combine deep CPA expertise with patent-pending AI governance frameworks to maximize tax recovery, optimize financial strategy, and provide CFO-level guidance to growth-stage companies. From SR&ED tax credit maximization to fractional CFO services and AI-powered advisory, we help ambitious businesses make smarter financial decisions and keep more of what they earn.

(905) 270-1873 | insightscpa.ca | Serving Mississauga, GTA, and Ontario

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*Disclaimer: This article provides general information about SR&ED tax credits and should not be construed as professional tax advice. SR&ED eligibility and credit calculations depend on specific facts and circumstances. Consra the CRA and qualified tax professionals before making claim decisions. While Insight Accounting CPA works diligently to maximize our clients’ legitimate tax recovery, we cannot guarantee specific claim outcomes or CRA approval. Tax laws and CRA policies are subject to change.*