How to File SR&ED in Ontario: T661, S566, and Provincial Credits

Ontario accounts for the largest share of SR&ED claims in Canada. If your corporation is based in Toronto, Waterloo, Ottawa, or anywhere else in the province, you are filing under the same federal rules as the rest of the country — but Ontario adds provincial schedules and credits that must align with your T661.

For a province-specific overview, see our SR&ED in Ontario guide.

Federal first: the T661

Every Ontario CCPC starts with the T661 — Scientific Research and Experimental Development (Expenditures) Claim. Lines 242, 244, and 246 carry your technical narrative; the financial schedules capture salaries, contractors, materials, and overhead (proxy or traditional method).

Federal refundable ITCs at 35% (on qualifying CCPC expenditure limits) are usually the largest line item in your refund.

Ontario provincial layer

Ontario corporations typically coordinate:

• S566 — Ontario SR&ED tax credit schedule (must reconcile with federal eligible expenditures)
• OITC — Ontario Innovation Tax Credit (8% refundable for qualifying CCPCs)
• ORDTC — Ontario Research and Development Tax Credit where applicable

The federal grind-down applies: provincial assistance reduces the pool of expenditures before federal ITCs are calculated. Model the combined rate, not 35% + 8% naively. Our federal vs provincial SR&ED explainer walks through the math.

What Ontario auditors see often

CRA reviewers in Canada's busiest SR&ED market have seen every generic software narrative. Specificity wins:

• Name the technical uncertainty, not the product roadmap
• Tie payroll and contractor hours to experimental work
• Keep S566 figures consistent with T661 — mismatches are a common review trigger

Software teams in the Toronto–Waterloo corridor should also read SR&ED for software companies for industry-specific eligibility boundaries.

DIY, consultant, or hybrid?

Ontario founders often debate whether to use claim software, a large advisory firm, or a focused practitioner-led team. Compare approaches in our DIY vs consultant guide and large firms comparison.

Next steps

1. Run a free readiness check against CRA's five-question framework
2. Gather payroll, invoices, and project documentation for the fiscal year
3. File before the 18-month deadline from your tax year-end