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.
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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.
Review the narrative and figures as one file
After drafting, compare the project dates, people and work described with the records behind the expenditure calculation. In SREDlog's T661 preparation workflow, linked evidence supports the narrative draft and reviewed financial values populate the form. Check the hours and their supporting records before approving labour totals.
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.
Sources and review
Checked against current primary sources
SREDlog Editorial Team completed an editorial source review on August 22, 2026. This records a primary-source check, not independent tax-professional advice.
- CRA T4088 guide to Form T661checked 2026-08-22
- CRA SR&ED Filing Requirements Policychecked 2026-08-22
- CRA prescribed proxy amount policychecked 2026-08-22
- Justice Laws: Income Tax Regulations, section 2900checked 2026-08-22
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This guide was checked against the linked CRA and enacted federal sources on August 22, 2026. It is general information, not tax advice, and has not been reviewed by an independent qualified tax professional. SR&ED rules, rates and limits change, so confirm the rules for the claimant's tax year before filing. See our editorial policy.