Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim
Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim
The CRA publishes Guide T4088, Scientific Research and Experimental Development (SR&ED) Expenditures Claim - Guide to Form T661, which gives details on how to complete Form T661. For more information, go to canada.ca/taxes-sred.
File Form T661 if you carry on business in Canada and have incurred expenditures for scientific research and experimental development (SR&ED) you carried on in Canada and for some salary or wage expenditures for SR&ED carried on outside Canada.
To avoid delays in processing, use the most recent version of Form T661.
A corporation has to file Form T661 to identify an expenditure and the SR&ED work to support its characterization as an SR&ED expenditure, as well as any claim preparer information.
If the corporation does not provide, in this way, the information about the expenditure, it cannot characterize the amount as an SR&ED expenditure.
If the corporation does not provide complete and accurate claim preparer information, a $1,000 penalty applies. However, the SR&ED claim will not be disallowed for this reason. When an SR&ED claim preparer participates in preparing a claim, the corporation and the SR&ED claim preparer are liable, together or separately, for the $1,000 penalty.
SR&ED expenditures, plus or minus adjustments, form a pool that you can deduct in the current year to calculate the net income for tax purposes or that you can carry forward and deduct in any future year.
If the SR&ED expenditures have been included in your income statement, enter the amount on line 118 of Schedule 1. Enter the SR&ED expenditures claimed in the year on line 411 of Schedule 1.
Form T661 summarizes the costs for all SR&ED projects. File it whether or not you claim an ITC. If you do not file Form T661 and Schedule 31, Investment Tax Credit - Corporations, on or before the day that is 12 months after the filing due date of your income tax return for the tax year in which the SR&ED expenditures were made, you cannot claim SR&ED expenditures and earn an SR&ED ITC for that year. For more information, see "Lines 652 and 780 - Investment tax credits" on page 88.
A non-profit corporation for SR&ED (see "Box 2 - Exempt under paragraph 149(1)(j)", on page 29) has to file Form T661 on or before the filing due date for the tax year to avoid a late-filing penalty.
When a corporation is a member of a partnership that incurs SR&ED expenditures, the partnership, and not the members of the partnership, has to file Form T661 along with the T5013 FIN, Partnership Financial Return, and T5013 SUM, Information Slips Summary. Each member that receives an information slip T5013, Statement of Partnership Income, showing its share of the expenditures, does not have to file it with its return. They should keep it in case the CRA asks for it later.
References
Subsections 37(1), 37(11), 149(7), 149(7.1), 162(5.1), and 248(1)
Regulation 2900
T4088, Scientific Research and Experimental Development (SR&ED)
Expenditures Claim - Guide to Form T661
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