SR&ED just had its biggest year, let’s dive into the data to understand who’s actually winning
CRA just released the 2025-26 program statistics for SR&ED, and the headline number is simple: it was the biggest year the program has ever had. 24,160 claims filed, $4.6 billion in investment tax credits allowed, both record highs.
When you line this year up against the last four, a more interesting story shows up. Who’s claiming, what field they’re in, and how much scrutiny they’re under have all shifted, and if you’re planning a claim in 2026, those shifts matter. This blog covers what you need to know about the state of SR&ED in 2026.
We pulled CRA’s full five-year dataset (2021-22 through 2025-26) and dug into what actually changed. Here’s what we found.
The 5-year SR&ED Numbers at a Glance
Before getting into what’s shifting, here’s the baseline. This is the whole program, year over year:
Fiscal year | Claims filed | ITCs claimed | ITCs allowed | Accepted as filed | Denied |
2021-22 | 20,332 | $3.4B | $3.3B | 91% | 3% |
2022-23 | 20,464 | $3.8B | $3.6B | 91% | 4% |
2023-24 | 21,524 | $4.4B | $4.2B | 91% | 3% |
2024-25 | 22,758 | $4.7B | $4.5B | 90% | 4% |
2025-26 | 24,160 | $4.9B | $4.6B | 90% | 4% |
Short answer: SR&ED is not shrinking; it’s growing, and it’s growing faster now than it was three years ago. Claims filed are up 19% over five years, and dollars allowed are up 39%.
The fastest way to know where your claim fits into this picture is a quick conversation. Book a free 30-minute SR&ED consultation, and we’ll walk through your specifics against what CRA is actually seeing this year.
SR&ED Program is Growing, not Shrinking
Claims filed grew 0.6% in 2022-23, then 5.2%, then 5.7%, then 6.2% this year. That’s not a program levelling off. It’s a program picking up speed, with 2025-26 posting the largest single-year jump in claim volume in recent history.
These changes are exciting as they are indicative of a government that supports, funds and encourages innovation. This is a very positive sign for scaling companies as the government seems to be shifting towards expanding and growing the SR&ED program, rather than shrinking or shutting down the program.
In late 2025, the Federal government announced several SR&ED changes that added an additional $500M to the SR&ED program, which took effect earlier in 2026. These changes will likely cause even further expansion to the program going forward, with increased funds for capital expenses, public companies and large private companies that previously were limited by the program. More on the 2026 SR&ED changes here.
More companies filing claims each year is good news for the program’s future, but it also means more claims are competing for the same pool of reviewer attention. That context matters for two sections coming up: field of science and processing times.
Where the Money is Shifting: SR&ED for Software
This is the most notable and a bit surprising data from what the CRA published. This is the percentage of allowed SR&ED credits allocated to the software development field of science.
That is a 6.9% increase in the total share of the SR&ED ITCs allowed in the software industry over the past 5 years.
Meanwhile, electrical engineering’s share nearly halved over the same window (18.0% down to 12.5%), chemistry had its sharpest single-year drop this year (6.8% down to 4.4%), and materials engineering compressed as well. Medical sciences and engineering are the other fields trending up, from 11.5% to 14.2%.
The AI Software Concerns – Not True at All
There’s been real concern in the SR&ED community that AI coding tools such as Claude Code, vibe coding, etc. would shrink software claims. If AI can write a lot of the routine implementation work, the thinking goes, there’s less “human eligible work” left to claim.
The data says the opposite happened, and it happened during the exact period AI coding tools went mainstream. Our read: AI hasn’t eliminated the eligible work; it’s shifted where the eligible work sits.
When routine coding gets automated, teams stop spending headcount and contractor dollars on “simple” implementation, bug fixes or generating thousands of lines of code, and put that budget into the harder, more clearly SR&ED-eligible work instead. Work such as architectural decisions, novel algorithm design, systematic experimentation to solve problems nobody’s solved before. That’s the work SR&ED was built to reward in the first place, and it’s the work that’s harder for AI to do on its own.
At GrowWise, we work with many software companies that were expecting to take a hit on the SR&ED claims in 2025 due to the implementation of AI software development tools, but in many cases, the opposite ended up happening. Since they were no longer paying as many junior devs to do the coding, they were able to shift their focus and budget to hiring senior AI architects who not only pushed their technology forward much more, but also inherently were doing almost 100% SR&ED-eligible work.
Their claim went from $200k for 3 junior developers and one senior developer (who were all only partially SR&ED eligible), to $300k in SR&ED for one junior dev and one AI architect. Even though the teams may be getting smaller, the work that the team members are doing becomes more challenging problem-solving, less implementation, bug fixes and simple development; therefore, more SR&ED eligible work.
Our software clients saw an average increase in their SR&ED claims of 12% from 2024 to 2025, as the teams focused their time on more challenging problem-solving, rather than simple coding and implementation. This growth happened despite the concerns that AI tools would reduce SR&ED claims.
If you’re a software company wondering whether AI-assisted development still qualifies, let’s chat and confirm if you are SR&ED eligible. We’ll walk through what’s still eligible in your specific workflow. Book a free consultation call with our team now.
More Small Businesses Claiming SR&ED in 2026
More claims than ever are coming from small businesses; 65% of all processed claims in 2025-26 came from small businesses (which the CRA considers businesses with less than $4 million in gross income).
Although income <$4M is a huge category of companies, from companies that are not yet profitable to sizable scaling companies, the CRA does not break the information down by any further level of detail.
With 65% of all claims being to these “small businesses”, that is a total of 15,390 claims. This group of claimants collected 33% of all allowed ITCs, which totals $1.52B, averaging just under $100k per claim.
Here’s how this compares to previous years:
Fiscal year | Processed claims | Small biz claims (64-65%) | ITCs allowed | Small biz $ share | Small biz $ total | Avg. claim size |
2021-22 | 20,317 | 13,003 | $3.3B | 32% | $1.06B | ~$81,200 |
2022-23 | 20,079 | 12,851 | $3.6B | 32% | $1.15B | ~$89,600 |
2023-24 | 21,537 | 13,784 | $4.2B | 32% | $1.34B | ~$97,500 |
2024-25 | 22,738 | 14,552 | $4.5B | 33% | $1.49B | ~$102,100 |
2025-26 | 23,677 | 15,390 | $4.6B | 33% | $1.52B | ~$98,600 |
The average claim size has been increasing over the past 5 years, indicating that the program is working well to not only bring more small businesses into the program, but also give those small businesses more money each. Of course, these are averages and many companies would be much above and below these amounts, but generally great to see the program funding more small businesses in Canada.
Refundable Claims Hit a 5-year High
59% of ITCs allowed in 2025-26 were refundable, up from 57-58% in each of the prior four years. It’s a small move, but it’s a consistent, real one.
Most CCPCs receive SR&ED as refundable tax credits (meaning cash in the bank) unless you owe the CRA money, in which case they pay themselves back first. If you’re an early-stage company with little or no tax payable, more of the program’s total dollars are landing in the refundable bucket that pays you cash, not just non-refundable credits that only offset tax owing.
For companies that are pre-revenue or reinvesting everything back into the business, that distinction is the difference between SR&ED putting real cash in the bank this year versus sitting as an unused credit carried forward. This is one of the clearest reasons SR&ED is worth investigating early rather than waiting until you’re profitable.
Many of our clients at GrowWise are startups and scaleups who receive SR&ED cash refunds. We always recommend using this cash injection to fuel further hiring and R&D, since it will then further increase the SR&ED claim the next year.
The CRA SR&ED Audit Rates
The CRA’s acceptance rates of SR&ED claims have remained almost constant over the past 5 years at around:
- 90-91% accepted as filed
- 6% accepted after modifications
- 3-4% denied
The CRA does not publish any data on how many claims were selected for review, or their First Time Claimant Advisory Services (FTCAS). All we can say for sure is that the end result of these audits is very consistent rates of denied claims, reduced claims and approved claims.
In the industry, it has been widely observed that the CRA is doing more SR&ED technical and financial audits as well as FTCAS meetings. At GrowWise, we’ve seen an audit rate of ~8% of claims, which is significantly lower than industry-expected standards of ~15%.
One observation we are able to confirm is that the timeline for SR&ED claim processing is getting longer. The 180-day service standard for claims selected for review sat at 98% in 2021-22, then fell to 95%, 94.1%, and 90% before recovering only partway to 92.5% this year.
We have seen many cases where the SR&ED claims that are selected for review take upwards of 5 months to go through the review process, to have the required meetings, send the documents, and wait for a final decision. This is the unfortunate reality of SR&ED audits, and exactly why we do everything to avoid them to begin with. Read this article now to understand the common CRA SR&ED audit triggers and how to avoid them in 2026.
It is because of these delays, and an increase in the number of claims being selected for audits, that there is an increased demand for stronger year-round SR&ED tracking. The only way to successfully survive a CRA audit and make it out with all of the SR&ED dollars is to have strong documentation that can substantiate the SR&ED claim.
This is exactly why GrowWise built year-round SR&ED tracking technology, not just year-end claim prep. The claims that hold up under review aren’t the ones with the best write-up; they’re the ones with a real evidence trail built as the work happened: dated notes, uncertainty logs, experiment records, time tracking tied to specific technical problems. Reconstructing that after the fact is possible, but it’s harder, slower, and more vulnerable to exactly the kind of review CRA is doing more of.
Thanks to the technology we’ve built, we save an estimated 15-20 hours of audit prep time for our clients. These audits can be messy, time-consuming and frustrating, which is why we’ve built the supporting tools to maintain sufficient evidence throughout the year and generate audit-proof technical logs for the CRA if required.
The State of SR&ED in 2026: What it Means for You
Early-stage or Small Business:
The share of total claims going to small businesses is at a record high, and more of the program’s dollars are refundable than ever. If you’re not already accessing SR&ED tax credits, now is a good time to check eligibility. The key here is that a small claim still needs real documentation to survive a closer look. Typically, we say that if the claim is going to be less than $15-20k, it typically isn’t going to be worthwhile. More information on whether or not you are ready for your first SR&ED claim here.
Software or Tech Companies:
AI-assisted development hasn’t shrunk your eligible work; it’s shifted eligibility toward architecture and experimentation. Don’t assume AI tools disqualify you, but do make sure your documentation reflects where the real technical uncertainty now lives, and what the true experimentation was.
Manufacturing, Chemistry, or Materials Companies:
Your field’s share of total ITCs has been shrinking for several years running. That’s not to say don’t apply. The recent changes to the SR&ED program mean that you can now include expenses for capital equipment like tools and machinery. These changes have the potential to increase the size of these claims in 2026 and going forward. The important step is documentation. Ensure any experiments that use specific tools or machines are documented and well-recorded.
The SR&ED Year in Review
Overall, the SR&ED program is growing and expanding. More claims and more money were approved in the 2025/2026 fiscal year than in the past 5 years. The program is expanding to include additional expenses such as capital assets, as well as limits increasing to allow companies to claim more. All in all, this data is great news for Canadian innovators.
This data tells you what’s true across the whole program. It doesn’t tell you what’s true for your company, your industry, or your specific technical work, and that’s where the numbers stop being useful on their own.
If you’re deciding whether or not to file SR&ED, whether your documentation would hold up under a closer look, or whether AI-assisted work in your codebase still qualifies, the fastest way to get a straight answer is a conversation. Book a free 30-minute SR&ED consultation with our team now, and we’ll look at your situation against what CRA is actually doing in 2026.
Quick-reference FAQ
Has SR&ED’s budget been cut?
No. The data shows the opposite: $4.6 billion in credits allowed in 2025-26, the highest in the program’s recent history, up from $3.3 billion five years ago.
Are more companies getting audits for SR&ED in 2026?
CRA doesn’t publish a direct audit count, but the trend lines point toward tighter scrutiny: lower “accepted as filed” rates, a higher denial rate, and slower processing on review-track claims compared to a few years ago. This indicates that while claims are very much still worthwhile to file, companies need to ensure they have sufficient documentation to withstand a CRA audit before they apply.
Is SR&ED only for big companies?
No. 65% of all processed claims in 2025-26 came from small businesses under $4 million in gross income, the largest share of any business size bracket by a wide margin. Companies of any size can claim SR&ED. We help companies as small as just a few people access SR&ED.
Does using AI coding tools disqualify my software claim?
Not based on what the data shows. Software’s share of total credits grew in 2026 even as AI-assisted development became mainstream, consistent with eligible work shifting toward higher-level technical problem-solving rather than disappearing.
