Does Software Development Qualify for SR&ED?
Software can qualify for SR&ED, but most software work doesn’t. The line is technological uncertainty: whether a competent developer could reach the result using known methods. Routine features, integrations and UI work usually don’t qualify; hard technical problems solved by experiment often do.
Does software development qualify for SR&ED?
Software development can qualify when the team is trying to resolve a technological uncertainty, something a competent professional couldn’t solve using standard practice, through a systematic investigation of hypotheses, tests and iteration. CRA’s guidance describes a ‘why’ (advancing technological knowledge where there is uncertainty) and a ‘how’ (systematic investigation by experiment or analysis); programming counts as support work when it directly serves that investigation (CRA’s guidelines on eligibility of work).
What software work can qualify, and what usually doesn’t?
| More likely to qualify | Usually hard to support |
|---|---|
| A new method to improve model accuracy, latency, privacy or reliability where standard techniques failed | Routine feature development |
| Hard data-processing, interoperability or infrastructure constraints with no known solution | Basic integrations with documented APIs |
| Security or performance limits that required testing new approaches | UI and UX redesigns |
| Prototypes, benchmarks and failed approaches that built new technical knowledge | Standard cloud configuration and DevOps |
| An engineering capability where the outcome was technically uncertain | No-code builds, customer customization, marketing and sales work |
How do you spot technological uncertainty?
Ask these questions about each piece of work on your roadmap:
- Did we know at the start whether, or how, we could achieve this technically?
- Would a competent developer outside the company know the answer from public knowledge?
- Did we form hypotheses and test them, with some failing?
- Did we learn something technical we couldn’t have looked up?
If the uncertainty is only commercial, such as whether customers will pay, it doesn’t count. If it’s only about effort or time, it doesn’t count either.
Which activities are excluded?
CRA guidance excludes market research and sales promotion, quality control and routine testing, social sciences and humanities research, commercial production, style changes and routine data collection, among others. Within a qualifying project, only the work that supports the technical investigation counts. For AI work specifically, see SR&ED for AI startups.
Claim the uncertainty, not the effort.
Hard, long or expensive work isn’t SR&ED by itself. Work where the technical answer was unknown can be.
How should you capture it?
Tag candidate work as it happens and note the uncertainty, hypotheses and results. The method is on SR&ED documentation, and the claim form on the T661 claim process. If you’re unsure before starting, consider pre-claim approval.
Frequently asked questions
Does software development qualify for SR&ED?
Some does. It must address technological uncertainty through systematic investigation, not just apply known methods.
Do SaaS companies get SR&ED?
Many do, for the parts of their work that resolve real technical uncertainty.
Do bug fixes qualify for SR&ED?
Routine bug fixing usually doesn’t. Investigating a problem with no known solution may be part of eligible work.
Do integrations qualify for SR&ED?
Basic integrations with documented APIs usually don’t. Hard interoperability problems with no known solution might.
Does UI design qualify for SR&ED?
Generally no. Style changes are excluded, and UX design is rarely technological uncertainty.
What is technological uncertainty?
Not knowing whether, or how, a technical result can be achieved using generally available knowledge and standard practice.
Sources & further reading
Standards and platform rules change. These sources let you verify the current requirements directly. All screens shown are mock-ups of fictional products.