December 11, 2025

SR&ED in 2025: Bigger Credits, Broader Access, and a Deadline You Can’t Afford to Miss

Written by Leanne Seel, CPA, CA
An image of a scientist in a lab in Ottawa who works for an organization that just applied for SR&ED

If your company is building, experimenting, or innovating, the Scientific Research and Experimental Development (SR&ED) program is one of the best ways to turn your hard work into tax savings. And starting with tax years that begin after December 15, 2024, the program is getting a major upgrade. Here’s what’s new, why it matters, and how to make sure you don’t miss out.

What Changed?

  • Double the Limit: The enhanced 35% refundable investment tax credit now applies to $6 million in annual qualifying expenses (up from $3 million). That means up to $2.1 million in refundable credits each year.
  • More Businesses Qualify: Certain Canadian public corporations (ECPCs) and their subsidiaries can now access the enhanced rate, which had previously been available only to Canadian Controlled Private Corporations (CCPCs).
  • Higher Phase-Out Thresholds: Prior to 2024, the expenditure limit began to be scaled back once a corporation’s taxable capital exceeded $10 million, with the phase-out completed at $50 million. Starting in 2025, the range has been expanded: the expenditure limit now begins to decrease when the corporation’s taxable capital or average gross revenue is above $15 million, and the expenditure limit is fully phased out at $75 million. CCPCs can pick the calculation each year – taxable capital or gross revenue – that keeps more of their expenditure limit intact.
  • Capital Costs Are Back: Machinery, equipment, and other capital property used for SR&ED and acquired after December 15, 2024 can once again earn SR&ED credits—restoring a benefit that disappeared in 2014.

Why It Matters

A company with $6 million in eligible costs could see its refundable credits jump from $1.05 million in 2024 to $2.1 million in 2025. In 2024, this company could only claim the enhanced credit of 35% on half of its expenses, and capital spending didn’t count. In 2025, the full $6 million qualifies, and capital expenditures are included. That means double the credits and a much bigger return on your innovation investment.

For growing companies, the higher phaseout thresholds mean you can keep accessing enhanced credits as you scale. And with public companies now included, the program is open to more innovators than ever.

Could You Be Missing Out on SR&ED Credits?

Many businesses carry out activities that qualify for SR&ED without ever claiming the credits. You don’t need a formal R&D lab to qualify. If your team is:

  • Developing new products or processes
  • Improving existing technologies
  • Solving technical challenges
  • Testing prototypes or new materials

…you may be eligible to claim SR&ED credits. The key is systematic experimentation aimed at technological advancement, even if it’s part of day-to-day operations.

Talk to your McCay Duff LLP consultant if you think there is a chance you could be eligible for SR&ED tax credits. A quick review could uncover significant savings for your business.

Don’t Miss the SR&ED Deadline

Here’s the catch: SR&ED claims must be filed within 18 months of your fiscal year-end. Miss that deadline, and the credits are gone for good. There are no extensions – this is a hard cutoff.

With the expanded program starting for tax years after December 15, 2024, now is the time to review your projects. Reach out to your McCay Duff LLP consultant to confirm your eligibility and maximize your claim.

If you have questions about SR&ED claims or credits, please get in touch with our office—we’re here to help. Contact us online or by telephone at 613-236-2367 or toll-free at 1-800-267-6551.