SR&ED Changes in 2026: What Founders Need to Know
SR&ED is more valuable and more accessible than it was a few years ago. Bill C-15 received Royal Assent in March 2026, and CRA launched a pre-claim approval process in April. The changes apply to tax years beginning after December 15, 2024.
What changed in SR&ED for 2026?
Five changes matter most to founders. CRA lists them on its SR&ED news and updates page.
| Change | Before | Now |
|---|---|---|
| Enhanced 35% expenditure limit | $3M | $6M, for tax years beginning after Dec 15, 2024 |
| Taxable-capital phase-out | Narrower range | Begins at $15M and ends at $75M of prior-year taxable capital |
| Who gets the enhanced credit | CCPCs | CCPCs and eligible Canadian public corporations |
| Capital expenditures | Not eligible since 2014 | Eligible again for property acquired after Dec 15, 2024 |
| Pre-claim approval | Not available | Launched April 1, 2026, for eligible businesses |
What is the new limit worth?
At the full $6 million limit, the enhanced 35% credit is worth up to $2.1 million a year in federal credits. Most startups spend far less, so the bigger effect is on scaling companies that used to hit the old $3 million cap. The limit is shared by associated corporations and shrinks as taxable capital rises above $15 million. See how much SR&ED you get back.
Why does the wider phase-out matter?
Taxable capital includes equity raised, so a funding round can push it up. The wider phase-out means a growing startup keeps more of its enhanced credit after raising. Ownership still matters more: losing CCPC status can remove the enhanced refundable credit. See CCPC status and SR&ED.
What is pre-claim approval?
An optional process, launched April 1, 2026, where eligible businesses can ask CRA to assess planned work before starting it. CRA says it aims to give a determination within eight weeks. Who can apply and how are on SR&ED pre-claim approval (CRA’s pre-claim approval page).
More room to claim, same bar to clear.
The 2026 changes raise the ceiling, not the definition of SR&ED.
What should founders do now?
- Re-check last year’s and this year’s claims against the new limit and capital rules.
- Model the credit before any financing that raises taxable capital or changes control.
- Track eligible capital equipment bought after December 15, 2024.
- Consider pre-claim approval for a large, uncertain project.
Provincial credits have their own limits and didn’t all change: see the Ontario Innovation Tax Credit.
Frequently asked questions
What is the SR&ED expenditure limit in 2026?
$6 million for tax years beginning after December 15, 2024, up from $3 million.
Are the SR&ED changes law?
Yes. Bill C-15 received Royal Assent on March 26, 2026.
What is the SR&ED taxable capital phase-out?
The enhanced limit phases out as prior-year taxable capital rises from $15 million to $75 million.
Can public companies get the enhanced SR&ED credit?
Eligible Canadian public corporations now can, for tax years beginning after December 15, 2024.
Are capital expenditures eligible for SR&ED again?
Yes, for eligible property acquired after December 15, 2024, subject to the rules.
What is SR&ED pre-claim approval?
An optional CRA process, launched in April 2026, to assess planned work before you start it.
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.