• There must be a technological or scientific advancement (248.1 (A)).
• There must be an uncertainty concerning the aimed technologies (248.1(B)).
• The work must have been carried out in a field of science or technology through a systematic investigation or search by means of experiment or analysis (248.1(C)).

If you can demonstrate that your activities respect these three criteria, you will receive cash refund and/or tax credit for your expenditures on eligible R&D work.

Did you know that this same tax law has a fourth criterion which makes eligible certain activities? The paragraph (d) of the 248.1 article specifies that the routine work, in support of the work respecting the first three criteria may also be eligible. According to the Guide to Form T661, support work includes the qualifying statement routine work, the engineering studies, computer programming, conception, etc. These support activities are not eligible as independent SR&ED projects. However, they are accepted if they are proportionate with and directly support, eligible SR&ED activities.

For example, you have developed a video compression algorithm that increases the transfer speed and the rendering quality of the information to offer better performance for video conferences. To prove your hypotheses right, you program a light Web-based user interface. This interface is considered as “routine work”, but it could be eligible if you demonstrate that this activity had a role to play in the whole SR&ED project.

Therefore, it is essential to demonstrate that all claimed activities were directly related to the prosecution of SR&ED. Pertinent data (who, when, what) will allow you to explain the procedure employed to distinguish the SR&ED and the support activities from activities that are not.