Reviewed by Logan Hanson, BSc, CPA. Last verified against CRA guidance on August 4, 2026.
A lot of SR&ED money that gets left behind isn’t lost at the eligibility stage. It’s lost to documentation gaps: eligible work that was real but couldn’t be backed up when it counted. With the enhanced expenditure limit now at $6 million, claims are bigger and the cost of a gap is bigger too. Here are the documentation gaps I see most often, why they hurt, and how to close each one in 2026.
The most common gaps are missing contemporaneous evidence, narratives that describe the product instead of the uncertainty, no way to trace who spent time on the eligible work, lost or deleted failed experiments, and costs that don’t reconcile with the technical story. Each one quietly shrinks a claim or weakens it under review. Let’s take them one at a time.
Missing contemporaneous records is the most damaging gap. If the only account of the work is written months later for the claim, it’s far weaker than records made while the work happened. Close it by capturing a light, dated trail as you go: a line on the ticket, a note at each decision, the benchmark you ran.
A write-up that reads like a feature announcement misses the point. The CRA is looking for the technological uncertainty, not the customer benefit. Close it by framing each project around what you didn’t know and how you investigated it, not around what the product does.
If you can’t show who worked on the eligible work and roughly how much, you end up guessing at allocations you can’t support, and usually guessing low. Close it by labelling R&D tickets and projects so time can be traced back to the eligible work later.
Failed branches and abandoned spikes are some of your strongest evidence that the work was genuinely uncertain. Delete them and you delete the proof. Close it by keeping and tagging failed experiments instead of clearing them out.
When the dollars don’t line up with the narrative, a reviewer notices. Contractor costs with no matching technical work, or salaries that don’t map to the projects described, weaken the whole claim. Close it by keeping the costing consistent with the technical story from the start.
Documentation gaps matter more in 2026 because the enhanced refundable limit rose to $6 million, so a well-documented year can now return more, and a gap can cost you more. The limit phases out with taxable capital and is shared among associated corporations. The underlying documentation expectations are the same as before: contemporaneous records showing technological uncertainty, systematic investigation, and the technological advancement you sought. What changed is the stakes. With up to $2.1 million refundable a year on the table for a qualifying CCPC, the gap between a fully documented claim and a thin one is now measured in larger numbers.
A documentation gap turns eligible work into unclaimable work. Take a CCPC with about $400,000 of genuinely eligible work in its year. Because it deleted its failed branches and never labelled R&D time, it can only confidently support $250,000 of it, for about $87,500 in federal credit before overhead and provincial credits.
Had it kept that evidence, it could have supported the full $400,000, for roughly $140,000 in federal credit before the prescribed-proxy overhead amount and provincial credits. That’s about $52,500 of federal credit left behind, on work that actually happened, purely because it couldn’t be backed up. This is illustrative, so your numbers will vary. For a qualifying CCPC the enhanced 35% credit is refundable, applies to the first $6 million of qualifying expenditures, phases out with taxable capital, and shares that limit among associated corporations. See our State of SR&ED overview for the wider picture.
Before filing an SR&ED claim, check that every project has dated evidence, traceable labour, preserved failed experiments, and costs that match the technical work. Run this throughout the year, too, so the gaps don’t open in the first place.
SRED.ca charges a flat fee, billed monthly, never a percentage or contingency fee, which usually works out to roughly half the lifetime cost of a percentage-based firm. As far as we know, we’re the only SR&ED provider that publishes its pricing on its website. We track your eligible work year-round, which is the most reliable way to stop documentation gaps from opening, because the evidence gets captured while it’s fresh. We’re CPA-owned, audit defense is included, and if the CRA approves less than 75% of the filed claim we waive our fees, as set out in our 75% guarantee. If there’s no eligible work in your year, you don’t pay.
Documentation gaps are the quiet reason good R&D years turn into thin claims. Most of them close with small habits kept through the year, and the one gap you can never close is a missed deadline. If you want a review that finds your gaps while there’s still time to fix them, grab a free consultation. The CRA’s SR&ED program page lays out what your records need to show.
Related reading: why tech firms struggle with SR&ED claims, how to fix SR&ED claim delays, and what could go wrong if founders file on their own.
It’s eligible work you can’t adequately back up: real R&D that lacks the contemporaneous records needed to support it in the claim or under review. The work qualifies, but the missing evidence makes it risky or impossible to claim with confidence.
Sometimes partly. You can reconstruct some evidence from commit history, tickets and release notes, which carry their own dates. But records you never made or work you deleted can’t be recreated honestly, so those gaps stay open. The reliable fix is to capture evidence during the year.
No contemporaneous evidence of the uncertainty and the investigation. Without it, even genuinely eligible work is hard to support, because you can’t show what you didn’t know or how you worked through it. That’s the gap that quietly costs the most.
The core documentation expectations are unchanged: the CRA still wants contemporaneous records showing technological uncertainty, systematic investigation, and the technological advancement you sought. What changed in 2026 is that the enhanced expenditure limit rose to $6 million, so larger claims are possible, which makes good documentation more valuable than before.
No. There’s no prescribed format. What matters is that the evidence is contemporaneous, dated, and clearly tied to the technical work. For software teams, dated development artifacts usually do the job, as long as they show the uncertainty, the investigation, and what you were trying to advance.
Your agile artifacts can be the documentation. Tickets, pull requests, stand-up notes and sprint records already capture the problem, the attempts and the outcomes. Labelling the R&D work and keeping the failed experiments turns that normal flow into strong SR&ED evidence.
This article is general information, not tax advice. Tax figures depend on your corporation type, province, and taxation year.
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