Form T661: how to complete the SR&ED claim form (2026 version)

This is an independent guide. ClearSRED is not affiliated with the Canada Revenue Agency. For the overall filing process, see how to file an SR&ED claim. This page walks through the form itself, part by part.

What does Form T661 contain? (as of October 2026)

The current form is 11 pages. These are the rules that matter most.

How do you fill out Part 1 (general information)?

Part 1 identifies the claimant: name (line 010), tax year, and business number or, for an individual, social insurance number. Line 050 is the number of projects claimed this year, which should match Part 6A. Lines 100 to 106 name the financial contact and lines 115 to 121 the technical contact; pick someone on your own team who can explain the work in a review. Lines 151 to 157 apply only to partnerships that didn't file a T5013.

How do you complete Part 2 (project information)?

Part 2 tells the CRA what each project was and why it qualifies. Complete a separate Part 2 for each project.

Section A: project identification (lines 200 to 221)

• Lines 200 to 204: a specific project title, the start date and the (expected) completion date. Guide T4088 defines the start as the point at which the scientific or technological uncertainties are identified, not when the product idea came up.
• Lines 206 and 207: the field of science code from Guide T4088 Appendix 1, and (new) the Statistics Canada CRDC field of research code, first five digits after "RDF". Both are for statistics, not eligibility.
• Lines 208 and 210: continuation of a previously claimed project, or first claim.
• Lines 212 and 214 (new): tick 212 if the project received pre-claim approval and enter the case number at 214. See our Form T1322 guide.
• Lines 218 to 221: any work done jointly with other businesses.

Section B: the three project descriptions

These answers carry the technical case. Use plain language and specifics a reviewer could check against your records.

• Line 242 (maximum 350 words): what scientific or technological uncertainty did you attempt to overcome? Name the specific unknown, why standard practice couldn't resolve it, and what you had already tried.
• Line 244 (maximum 700 words): what work did you perform in the tax year to overcome it? Summarize the systematic investigation: hypotheses, experiments or analyses, results, and how results changed the next step. Cover only work done in this tax year.
• Line 246 (maximum 350 words): what scientific or technological advancement did you achieve or attempt to achieve? State the new knowledge gained, including what you learned from approaches that failed. A failed project can still be an advancement in knowledge.

Not sure whether a project qualifies before you write? Start with SR&ED eligibility and our eligibility check.

Section C: additional project information (lines 253 to 282)

• Lines 253 to 259: who prepared Section B: an employee directly involved, another employee, or an external consultant (name and firm).
• Lines 260 and 261, key employees: up to three people directly involved, with their qualifications or experience and position titles.
• Lines 262 and 263 (new): if you claim capital expenditures for depreciable property acquired after December 15, 2024, list up to the 10 largest items used in this project and each one's percentage of total operating time for the project.
• Lines 265 to 269: yes or no questions on work outside Canada, work for another party, and work by non-employees.
• Lines 270 to 282, evidence: tick every type you have, such as planning documents, time sheets, lab notebooks, source code, test data and prototypes. You don't send them with the claim, but you must keep them for a review.

Worked example: a weak vs a strong line 242

Fictional example. "Prairie Moulded Components" and its project are made up for illustration. They aren't a real company or a real CRA submission.

Prairie Moulded Components injection-moulds glass-fibre-filled nylon housings. It tried to cut wall thickness from 2.5 mm to 1.2 mm on a bracket housing while holding flatness within 0.15 mm.

Weak answer

Our goal was to develop a next-generation lightweight housing to beat competitors on cost. This was very challenging and required extensive engineering effort and many hours of testing. We were uncertain whether we could hit our launch date and whether customers would accept the new design.

Why it fails: business goals, effort and market risk are not technological uncertainties. A reviewer can't tell what was technically unknown.

Stronger answer (excerpt)

The objective was a 1.2 mm wall bracket housing in 30% glass-filled PA66 with flatness within 0.15 mm after conditioning. Established design guidance for this material and our own process windows achieve that flatness at 2.0 mm and above. At 1.2 mm, initial trials using standard gate placement and packing profiles warped 0.6 to 0.9 mm, because fibre orientation in the thin section caused uneven shrinkage.

Commercial mould-flow simulation predicted warpage less than half of what we measured, so it could not be relied on to select gate locations or packing profiles. It was not known whether a combination of gate relocation, sequential valve gating and a modified packing profile could control fibre orientation enough to meet the flatness target at this thickness, or which of these variables dominated.

Why it works: measurable targets, numbers showing where known methods and tools fell short, and the exact unknown. Line 244 can then describe the gating and packing experiments, and line 246 what was learned.

How do you calculate expenditures in Part 3?

Part 3 adds up what you spent on SR&ED. Start with Section A: choose the proxy method (line 160) or the traditional method (line 162). The election is irrevocable for the year once the form is filed.

• Proxy method: you don't track overhead. Instead, Part 5 calculates a prescribed proxy amount. Enter "0" on line 360.
• Traditional method: you claim actual overhead directly related to SR&ED on line 360. Enter "0" on lines 355 and 502.

Section B then builds total allowable expenditures:

• Salaries (lines 300 to 309): the SR&ED portion of wages of employees directly engaged, split between specified employees (not at arm's length, such as owner-managers) and others, and between work in and outside Canada. Wages not paid within 180 days of year-end go on line 315 and are claimed on line 310 in the year paid.
• Materials and contracts (lines 320 to 345): materials consumed or transformed, and SR&ED contracted out, split into arm's length and non-arm's length.
• Lease costs (lines 350 and 355, new): equipment leased and used after December 15, 2024. Line 350 is for equipment used 90% or more for SR&ED. Line 355 is for equipment used more than 50% but under 90%: enter half the lease cost under the proxy method, or "0" under the traditional method.
• Lines 360 to 380: overhead (traditional method only), third-party payments (Form T1263), and total current expenditures.
• Line 390 (new): capital expenditures for depreciable property acquired after December 15, 2024, available for use and used 90% or more for SR&ED in Canada. Line 400 adds 380 and 390.

Section C (lines 420 to 470) tracks your pool of deductible SR&ED expenditures: the deduction you claim this year (line 460) and the balance carried forward (line 470).

What happens in Parts 4 and 5?

Part 4 turns allowable expenditures into qualified expenditures, the base for the credit, in current and capital columns.

• Add: totals from lines 380 and 390, the prescribed proxy amount (line 502), shared-use equipment (line 504, new) and amounts transferred to you.
• Deduct: government and non-government assistance, 20% of arm's length contracts and third-party payments (line 529), and other required adjustments.
• Result: current (line 557) and capital (line 558) qualified expenditures, totalled on line 559, plus repayments (line 560), giving total qualified expenditures for ITC purposes on line 570.

Provincial R&D credits count as government assistance, so work them out before you finalize these lines. See provincial SR&ED tax credits.

Part 5 applies only under the proxy method. The salary base excludes bonuses and taxable benefits, and specified employees are capped (at most 75% of their time, with a dollar limit tied to maximum pensionable earnings). The prescribed proxy amount on line 820 is 55% of the salary base, entered on line 502 unless the overall cap described in the guide applies.

What do Parts 6, 7 and 8 ask for?

• Part 6A, project costs (lines 750 to 759): salaries, materials, contracts, overhead and lease costs broken down by project, for every project claimed. Totals must tie back to Part 3.
• Part 6B, capital expenditures (lines 780 to 786, new): the 20 largest capital items, their cost and the projects they were used in. Names must match line 262.
• Part 6C, shared-use equipment (lines 788 to 796, new): the 20 largest items used more than 50% for SR&ED, with purchase date, 25% of capital cost and whether it is first-term or second-term.
• Part 7 (lines 600 to 638): statistics on funding sources, type of work and SR&ED staff in full-time equivalents.
• Part 8, claim checklist: confirms the current form, method choice, a Part 2 per project, Schedule 31 or T2038(IND) and related forms, and boxes 231 and 232 on the T2.

What do Parts 9 and 10 require?

Part 9 discloses anyone paid to prepare or help prepare the claim. Line 935 asks whether a claim preparer was engaged. If yes, list each one (lines 940 to 965): name, business number, billing arrangement code (contingency fee based on a percentage of the credit, hourly, daily, flat fee, or other), billing rate, a description of other arrangements in 10 words or less, and the total fee paid or payable. Whether or not you used a preparer, the authorized signing officer certifies the part on lines 970 and 975.

The $1,000 penalty. The form says a $1,000 penalty may be assessed if preparer or billing information is missing, incomplete or inaccurate, and the claimant and preparer are jointly and severally liable. Be wary of any preparer who suggests leaving Part 9 blank.

Part 10 is the overall certification. An authorized signing officer, or the individual, certifies that the form and attachments are true, correct and complete (lines 165 and 170). Line 175 names the person or firm who completed the form.

How does T661 connect to Schedule 31?

The T661 works out qualified expenditures; Schedule 31 turns them into the credit. In Part 8 of the 2026 Schedule 31, current expenditures come from T661 line 557 (line 350), capital expenditures from line 558 (line 360) and repayments from line 560 (line 370). Schedule 31 then applies the enhanced 35% or general 15% rate, the expenditure limit and the refundable portion. Read more about the SR&ED tax credit and the 2026 expenditure limit.

Both forms must be filed on time. The CRA's policy is that filing only the T661 gets you the deduction but no credit, and filing only Schedule 31 gets you neither. Work out your date with the SR&ED deadline calculator.

What changed in the 2026 version of T661?

The CRA published T661 E (26) on May 15, 2026, after Bill C-15 received Royal Assent on March 26, 2026. The lines marked "new" above come from it: the CRDC code (207), the pre-claim approval flag (212 and 214), capital property (262, 263, 390 and Part 6B), lease costs (350 and 355), shared-use equipment (504 and Part 6C), and the split of Part 6 into 6A, 6B and 6C. The word limits on lines 242, 244 and 246 did not change. Guide T4088 is being revised; until then, use the interim instructions on the CRA's SR&ED updates page.

Pre-filing checklist

1. Right form

   You are using T661 E (26), with Schedule 31 from the same release.

2. Every project defined

   Line 050 matches Part 6A, and each project has a Part 2.

3. Descriptions within limits

   Lines 242, 244 and 246 are under 350, 700 and 350 words, and every claim in them traces to a record.

4. Method chosen

   Line 160 or 162 is ticked, and lines 355, 360 and 502 follow that choice.

5. Figures reconcile

   Part 6A ties to Part 3, salaries tie to payroll, and assistance (including provincial credits) is deducted.

6. Parts 9 and 10 signed

   Every paid preparer and billing arrangement is disclosed, and the signing officer has certified both parts.

7. Filed on time

   T661 and Schedule 31 go in with the T2, or by the reporting deadline at the latest.

What are the most common T661 mistakes?

• Describing products and business goals on line 242 instead of a technological uncertainty.
• Writing line 244 as a project diary rather than a systematic investigation with hypotheses, tests and results.
• Ticking evidence boxes you can't back up. Reviewers may ask for any item you tick.
• Mixing up the methods, such as entering overhead on line 360 under the proxy method.
• Claiming capital or lease costs from before December 16, 2024, which don't qualify.
• Incomplete Part 9 disclosure, which risks the $1,000 penalty.

If your claim is selected for review, the research and technology advisor works from the procedures in the CRA's Claim Review Manual and will test your Part 2 against your records. Read what to expect in an SR&ED review.

1. CRA: Form T661 E (26), PDF
2. CRA: Form T661 (form page)
3. CRA: Guide T4088, Guide to Form T661
4. CRA: SR&ED news and updates (interim T661 instructions)
5. CRA: Schedule 31, Investment Tax Credit – Corporations
6. CRA: SR&ED Filing Requirements Policy
7. CRA: Claim Review Manual for Research and Technology Advisors
8. CRA: The SR&ED Review Process, A Guide for Claimants