CRA review guide
Prepare an organized record for the technical and financial questions a CRA review may test.
A CRA review asks the claimant to support the work and amounts already reported. The easier the path from narrative to source record and calculation, the less reconstruction the team has to do under a deadline.
This guide explains how a review begins, which questions may follow and how to prepare an organized response from the existing claim record.
Selection means the CRA needs more information
The CRA says a claim is selected when it needs additional information. Selection by itself does not say what the outcome will be. The CRA identifies the issues and projects it plans to review during its initial contact with the claimant.
Expect both technical and financial questions
A CRA review may examine the eligibility of the work, the claimed expenditures, or both. A research and technology advisor generally reviews the work, while a financial reviewer examines the expenditures. Depending on the issues identified, the reviewers may ask for:
- Contemporaneous records, planning documents, design notes, test results, lab notebooks.
- Evidence of experimentation: what you tried, what you measured, what changed.
- Time records linking people and hours to specific SR&ED work.
- Support for the costs claimed, payroll, contracts, invoices.
Build a package the reviewer can follow
Organize the response around the issues and projects the CRA identified. A useful package may include:
- The filed technical narratives, with uncertainty, work and advancement easy to distinguish.
- Each project's supporting evidence, indexed and dated.
- A map connecting each project, activity, person, source record and claimed amount.
- A financial summary reconciled to Form T661 and the claimant's records.
- The preparation and approval history for material figures.
Answer from the record you already have
Confirm the request, responsibilities and response dates, then work from records created while the project was underway. Filing-time explanations can clarify those records, but should not be presented as contemporaneous source evidence. Keep each response tied to the issue the reviewer raised.
Prepare long before a review letter arrives
Prepare for a possible review while the work is happening. Keep records as you go (see the documentation guide), write specific narratives in the T661, and connect each material hour and amount to its source. SREDlog helps organize those links and generates an indexed review package.
Frequently asked questions
It may be. The CRA says selection means it needs additional information; it does not publish a simple list of triggers that predicts whether a particular claim will be selected.
The assigned reviewers contact the claimant, identify the issues and projects they plan to examine, explain the meeting process and confirm what supporting information is needed.
Businesses generally must keep required records and supporting documents for six years from the end of the last tax year they relate to. Different periods can apply in specific circumstances.
Yes. A review may result in adjustments. The CRA provides its findings, and formal objection and appeal routes remain available if the claimant disagrees.
Contemporaneous evidence of the work and the costs, planning, design, tests, source history, time records, payroll and contracts. See the documentation guide.
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This guide is general information, not tax advice. SR&ED rules, rates and limits change, so confirm the current figures with the CRA or your advisor before you file.