A rejected or reduced SR&ED claim is rarely a surprise to anyone who understands what went into it — the warning signs are usually visible well before filing. Understanding the most common failure points makes it much easier to catch them early.
Reason 1: The Narrative Describes the Product, Not the Uncertainty
A claim that reads like a product feature list, rather than an account of what wasn’t known and how the team found out, gives a reviewer nothing to evaluate against the eligibility test. The narrative needs to name the specific uncertainty and how it was resolved.
Reason 2: Documentation Was Reconstructed, Not Contemporaneous
Records created months after the fact, all with suspiciously consistent formatting and timing, read very differently to a reviewer than tickets, commits, and notes generated as the work happened.
Reason 3: Routine Work Was Bundled In With Eligible Work
Claiming an entire project — including the routine implementation, testing, and deployment portions — when only a core piece involves genuine technical uncertainty invites a reviewer to push back on the whole claim rather than just the portion that shouldn’t have been included.
Reason 4: Expenditures Don’t Trace to the Claimed Work
● Time allocations that don’t reconcile with payroll records or timesheets
● Contractor invoices that don’t clearly describe SR&ED-related work
● Overhead or material costs claimed without a clear link to the eligible project
Reason 5: The Claim Was Filed Late or Incomplete
Missing the filing deadline, or submitting a T661 with gaps a reviewer has to chase down, both slow the process and increase scrutiny — even when the underlying work is genuinely eligible.
