Can my Ontario software company qualify for the SR&ED tax credit?

Yes, an Ontario software company can qualify for the SR&ED, Scientific Research and Experimental Development, tax credit, and this program isn't limited to traditional laboratory science the way many business owners assume. Software development can absolutely qualify, but eligibility depends on the nature of the work itself, not the industry, the project needs to involve a genuine attempt at technological advancement and resolve real technological uncertainty that couldn't be worked out through standard, routine programming practice.

This means ordinary feature development, bug fixes, or applying well-known techniques in a conventional way generally won't qualify, even if the work is genuinely difficult or time-consuming, the test is about advancing knowledge or technology and facing real uncertainty about whether or how something could be achieved, not simply about the effort or skill involved. A company building genuinely novel algorithms, architectures, or technical approaches where the outcome wasn't a foregone conclusion has a much stronger claim than one doing standard application development.

Because the eligibility test is specific and the potential benefit, including a refundable credit for many smaller corporations, can be significant, an Ontario software company unsure whether its work qualifies should get its specific projects assessed against the SR&ED criteria rather than assuming either automatic eligibility or automatic disqualification.