T661 form guide
Work through the T661 project descriptions, expenditure sections and supporting schedules.
Form T661 has two jobs: describe the claimed project work and calculate the related expenditures. The project descriptions are short, so every sentence has to carry technical information rather than product history or marketing language.
This guide follows lines 242, 244 and 246, then the financial sections and the mistakes that make a form harder to review.
What the T661 is
Form T661 is the prescribed SR&ED expenditure-claim form. Part 2 holds the project descriptions, and later parts calculate the expenditures. Corporations calculate the investment tax credit on T2 Schedule 31; individuals use Form T2038-IND.
Line 242: name the technological uncertainty (350 words)
Describe what the available knowledge could not tell the team and why standard practice did not provide the answer. Name the technical limit, not the commercial goal. 'Build a faster application' is a target; the measured failure of known indexing approaches under a defined access pattern begins to explain an uncertainty.
Line 244: follow the work performed (700 words)
Follow the systematic investigation through its material hypotheses, experiments or analysis, measurements and conclusions. Explain how one result changed the next step. A feature list shows what shipped; line 244 needs to show how the team investigated the technical problem.
Line 246: state the advancement sought (350 words)
Describe the scientific or technological advancement the work sought and the knowledge it produced, including useful negative results. Keep the answer tied to line 242. A shipped feature may be the commercial result, but it is not a substitute for the advancement.
The financial sections
The later parts of Form T661 capture the expenditure calculation and the choice between the traditional and proxy methods. Under the proxy method, the prescribed proxy amount is generally calculated at 55% of the salary base, subject to the detailed rules and limits in the CRA policy. The amounts must reconcile to the claimant's records and flow into the applicable investment-tax-credit form.
Common mistakes
- Writing marketing copy instead of describing technological uncertainty.
- Listing features and tasks on line 244 instead of experiments and results.
- Submitting descriptions that do not stay within the stated word limits.
- Claiming hours that aren't backed by any time record or evidence.
- Missing the filing deadline for the prescribed information.
Frequently asked questions
Form T661 limits lines 242, 244 and 246 to 350, 700 and 350 words respectively. The CRA says to focus those answers on technical facts and use the language of people who performed or understand the work.
Line 242 describes the technological uncertainty, line 244 the systematic work performed, and line 246 the advancement sought or achieved. The three answers should describe the same project from different angles.
Yes. Each project gets its own set of descriptions, and the financials are reported in total for the claim.
Under the proxy method, the prescribed proxy amount is generally calculated at 55% of the salary base, subject to the detailed rules and limits in the CRA policy.
Yes. SREDlog uses the project's linked evidence to draft lines 242, 244 and 246 for your review. It also prepares the T661, T2 Schedule 31 and supported provincial forms.
Keep reading
Prepare your next SR&ED claim in SREDlog
Start a free trial with one client, tax year and active project.
7-day free trial · No credit card required
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.