Canada Revenue Agency
New SR&ED Claim Form and Guide (Addendum)

Questions and Answers

Since the publication in November 2008 of the new Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and T4088, Guide to Form T661, the CRA has consulted extensively with SR&ED claimants and stakeholders across the country.  The following answers are in response to the most commonly identified questions on the new Form T661 and Guide (T4088).

1. Does the new Form T661 and Guide (T4088) introduce new SR&ED policies?
2. If I accidentally neglect to tick a certain box or I tick the wrong box on Form T661, will my claim be denied?
3. If my project is temporarily stopped for business or other reasons, should I enter this date on line 204 of Form T661?
4. Which field of science and technology code should I use on line 206 of Form T661 if the project has activities covering several fields?
5. Can I submit Industrial Research Assistance Program (IRAP) project summaries instead of completing Part 2 of Form T661?
6. Will the CRA disallow a project based on the technical content or quality of the narratives provided on lines 240 to 252?
7. Where can I get more information?

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General

Q.1  Does the new Form T661 and Guide (T4088) introduce new SR&ED policies?

A.1  No. There have been no changes to the SR&ED program's policies or their application as a result of the new Form and Guide.

The SR&ED legislation and the program's application policies and other technical publications remain in force. This means that the program's eligibility and expenditure requirements remain the same. The technical publications should take precedence over the guide.  The Guide is meant as an aid to completing the form.

Q.2  If I accidentally neglect to tick a certain box or I tick the wrong box on Form T661, will my claim be denied?

A.2  No, with one exception.

A number of new tick boxes have been added to Version (08) of Form T661 that did not exist on previous versions, particularly in Parts 2 and 7 of the Form.  The CRA added these tick boxes to the Form to assist claimants in providing as much pertinent information as possible to the CRA, the intent of which is to enhance the quality of claims received, and thus to expedite the processing and review of claims by the CRA.

Your claim will not be denied, nor will your projects or expenditures be disallowed because you did not tick a box or because you ticked a wrong box.  If you neglect to tick the appropriate box when your claim is initially filed, you can provide the information to the CRA reviewer during the review of the claim even if the SR&ED reporting deadline (18-months after tax year end for corporations, 17.5 months for individuals) has expired.

Exception: You must tick one of the boxes at line 160 or 162 to select the traditional or proxy method.

For additional details on choosing the method to calculate SR&ED expenditures and on the SR&ED filing requirements, see the T4088, Guide to Form T661, Interpretation Bulletin IT-151R5 (Consolidated), Scientific Research and Experimental Development Expenditures, and Application Policy 2004-02R, Filing Requirements for Claiming SR&ED.

Part 2 of Form T661

Q.3 If my project is temporarily stopped for business or other reasons, should I enter this date on line 204 of Form T661?

A.3  If a project is temporarily stopped but expected to resume at a future date, enter the date you expect the project to be completed at line 204. If you do not know the expected completion date, enter the date the project is temporarily stopped. Please refer to line 204 in the Guide (T4088) for further information.

Q.4 Which field of science and technology code should I use on line 206 of Form T661 if the project has activities covering several fields?

A.4  Select the field of science or technology that best describes the primary field that the SR&ED project was attempting to advance.  While a project may include activities in several fields, Form T661 requires you to identify one field of science or technology that relates to the overall objective of the project. You do not have to break down the project into subprojects for each field of science or technology.

Selecting the best overall code will be helpful in providing a focused response to the question at line 240 or 250 concerning advancement.

Q.5 Can I submit Industrial Research Assistance Program (IRAP) project summaries instead of completing Part 2 of Form T661?

A.5  No. All claimants are required to complete Part 2 of Form T661. IRAP summaries, statements of work and progress reports may be helpful in completing Section B or C of Part 2 of Form T661 and could serve as useful documentation to support the claim in the event of a review.

Q.6 Will the CRA disallow a project based on the technical content or quality of the narratives provided on lines 240 to 252?

A.6 No. The CRA will not disallow a project based on the quality or technical content of the narratives for these lines. Lines 240 to 252 are designed to encourage shorter and more direct responses to assist claimants in providing the information needed to meet the eligibility requirements. The information contained in the answers to Part 2 of Form T661 is intended for the CRA to carry out an initial review of the work that has been claimed. Clear and concise descriptions will allow the CRA to expedite the review and process the claim as quickly as possible.

If the narratives lack sufficient or pertinent technical detail, we will refer the claim to a CRA Research and Technology Advisor (RTA) for further review. Claimed work can only be considered ineligible after a detailed review by an RTA. A detailed review will usually involve a site visit and discussion with the claimant for further clarification and additional information. The claimant will have an opportunity to provide any further information that may be required by the CRA. The claimant will also be able to discuss recommendations on how to ensure that future narratives provide sufficient and pertinent technical detail within the word limits allowed. It is important that claimants address such recommendations in order to improve the quality of the project narratives on lines 240 to 252—to expedite the processing of future claims.

It is important to note that the CRA will disallow a project if no project details are provided on lines 240 to 252 by the reporting deadline. However, if the claimant files the SR&ED claim at least 90 days before the reporting deadline, the CRA will have sufficient time to review the claim and advise the claimant of any deficiencies in the claim before the reporting deadline. (Please refer to AP2004-02R, Filing Requirements for Claiming SR&ED.)

For more information

Q.7 Where can I get more information?

A.7  For more information about the SR&ED program, visit the CRA SR&ED Web site at www.cra.gc.ca/sred or contact your nearest tax services offices listed on our Web site at www.cra.gc.ca/sred under the section "SR&ED contacts".