SR&ED for Doctors, Dentists, and Medical Specialists in Canada (2026)

Junaid is a Master of Taxation and one of the partners at SRJ Chartered Professional Accountants. He works with incorporated physicians, dentists, and surgeons across Ontario, advising on Medical Professional Corporation structure, tax planning, and, where the work genuinely qualifies, SR&ED claims for clinical research. 

Key Takeaways

• Doctors, dentists, and surgeons performing genuine clinical research through their Medical Professional Corporation (MPC) can claim SR&ED, but the eligibility is fact-specific and the CRA scrutinises medical claims carefully.
• The work has to be true scientific research with technological or scientific uncertainty, not routine patient care, even when the patient care is at the leading edge of practice.
• The CRA has issued a public warning about dental SR&ED tax schemes, third parties promising SR&ED refunds for using a commercial product on patients in a “study” arrangement.
• The CRA archived its dedicated medical SR&ED guidance page in 2025, and claims are now evaluated under the general SR&ED rules with fact-specific analysis of each collaboration arrangement.
• Where the MPC qualifies as a CCPC, it can access the enhanced 35% refundable rate on up to $6 million per year under Bill C-15 (effective for tax years starting on or after December 16, 2024).
• The most common pitfall is double-counting work that is also being funded or compensated by a hospital, university, or grant body.

The Scientific Research and Experimental Development (SR&ED) tax credit program is open to physicians, dentists, surgeons, and other medical and dental specialists who carry out genuine clinical research through a Medical Professional Corporation (MPC) or other eligible entity. In our practice in Toronto and Mississauga, we work with clinician-investigators across cardiology, oncology, dental research, surgical innovation, and other fields who claim SR&ED for clinically-based research that meets the program’s requirements.

The eligibility analysis for medical SR&ED is unusually fact-specific. Unlike a tech company’s SR&ED claim, where most of the work happens inside one entity, medical research typically involves multiple parties: the physician, the MPC, the hospital, a university, and sometimes a regional health body. Each collaboration arrangement affects who is entitled to claim what. 

And the CRA has been increasingly cautious on medical and dental claims, including a public warning in late 2025 about dental tax schemes. This guide covers what qualifies, what doesn’t, and what’s changed for 2026.

What Changed in 2025–2026

• Bill C-15 (royal assent March 26, 2026) doubled the enhanced SR&ED expenditure limit from $3M to $6M and raised the phase-out range to $15M–$75M of taxable capital. For incorporated medical and dental practices that qualify as Canadian-controlled private corporations, the enhanced 35% refundable credit now applies to the first $6 million of qualifying expenditures.
• The CRA archived its dedicated medical SR&ED guidance page (SR&ED claims made by physicians and medical professional corporations, Information for claimants). The CRA’s general SR&ED rules and policies still apply, but the dedicated MPC framework is no longer maintained as standalone guidance.
• The CRA issued a public warning about dental SR&ED tax schemes, specifically third parties marketing “study” arrangements involving commercial products. Practitioners considering medical or dental SR&ED claims should now be more cautious about whom they take advice from and from whom.

Who Qualifies for Medical SR&ED in Canada

The eligibility test for medical SR&ED is the same three-part test that applies to every other SR&ED claim. The work has to involve:

• Scientific or technological advancement, pushing medical knowledge or technological capability beyond what was previously known
• Scientific or technological uncertainty, a real question that couldn’t be resolved using standard medical practice or existing published knowledge
• Systematic investigation, a structured process of forming hypotheses, designing studies or interventions to test them, gathering and analysing results

The CRA’s general position is that medical research is the kind of work that often meets these criteria. Investigating new treatment protocols, conducting clinical trials, developing novel diagnostic approaches, testing new surgical techniques, exploring previously unanswered questions about disease mechanisms, all of these can qualify when they involve genuine uncertainty and systematic investigation.

What doesn’t qualify, no matter how skilled the practitioner, is routine clinical practice, even when the practice is at the leading edge of the field. Doing your day job well is not SR&ED. Adopting a new technique that someone else has validated is not SR&ED. Using a new commercial product on patients to observe what happens is generally not SR&ED; it’s often clinical practice with a different tool.

The hard line: SR&ED requires the practitioner to be answering a research question, not the patient’s care to involve something new.

Which Entity Can Actually Claim the Credit

SR&ED can only be claimed by the entity that directly undertook the work and bore the expenditures. For medical research, that question is harder than it sounds because of the collaboration patterns common in clinical work.

Three things determine which entity can claim:

1. Who employed or contracted the researchers? If the physician is an employee of the MPC and the MPC paid the salary, the MPC can claim. If the physician is an employee of a hospital and the hospital paid the salary, the MPC cannot claim that time.
2. Who paid for the materials, supplies, and equipment used? SR&ED expenditures have to be borne by the claiming entity. If the hospital provided the equipment and absorbed the cost, the MPC isn’t claiming that.
3. Whether the research has been funded by a grant or another body: Grant-funded research is a particularly common source of disqualification. If the work has been funded by CIHR, a hospital research fund, a pharmaceutical sponsor, or another grant body, the MPC generally cannot also claim SR&ED expenditures for the same work; the grant funding reduces or eliminates the claimable expenditure base.

The collaboration pattern with hospitals, universities, and regional health bodies is what makes medical SR&ED unusually complicated. A clinician-investigator running a study at a teaching hospital may be working in three capacities: as a hospital employee, as an MPC operator, and as a university-affiliated researcher, and the SR&ED claim has to isolate the portion of work undertaken and funded by the MPC specifically. 

Sloppy claims that double-count work funded elsewhere are the most common reason medical SR&ED claims get reduced under CRA review.

What Counts as Medical SR&ED, and What Doesn’t

Likely to qualify:

• A surgeon developing and validating a new surgical technique not previously documented in the literature, with structured outcome measurement across cases
• An oncologist running a clinical trial of a new treatment protocol with formal study design, ethics approval, and pre-registered endpoints
• A dental specialist investigating a new approach to a recurring clinical problem, not by applying an existing technique, but by developing and systematically testing a novel intervention
• A clinician-scientist developing a new diagnostic tool or biomarker assay, with experimental validation
• A medical device innovation undertaken by an incorporated physician, with documented prototyping and testing cycles

Unlikely to qualify, even when skilled and innovative:

• Adopting a new technique developed elsewhere into your existing practice
• Using a new commercial drug, device, or material on patients to observe how it performs (“the manufacturer says it works, we tried it and it does”)
• Refining your own practice based on patient outcomes, without a formal study design
• Participating in industry-sponsored trials where the sponsor is funding the work (the MPC isn’t bearing the expenditures)
• Routine record-keeping or quality improvement work that doesn’t involve a genuine scientific question

The phrase that helps is “answering a question the literature can’t answer.” If the literature already answers it and you’re applying the answer, that’s clinical practice. If you’re investigating something the literature doesn’t yet answer, with structured methodology, you’re potentially doing SR&ED.

A Note on Dental SR&ED Tax Schemes

In late 2025, the Canada Revenue Agency issued a public warning specifically directed at dental practitioners. The CRA’s concern: third-party marketing arrangements where a dental practice uses a commercial product on patients as part of a “study,” with the third party then arranging or assisting with an SR&ED claim based on that activity.

The CRA’s position is direct. Using a commercial product on patients in clinical practice, even when documented as a “study,” generally does not meet the SR&ED test of scientific uncertainty and systematic investigation. The CRA has classified some of these arrangements as tax schemes, with potential consequences including disallowance of the claim, repayment of any refund received, interest, and penalties.

The pattern to be cautious about:

• A third party (not your existing accountant) approaches your practice with an SR&ED opportunity
• The arrangement involves using a specific commercial product on patients
• The third party handles the claim preparation, often on a contingency basis
• The third party characterises the routine clinical use of the product as “research.”

If you are considering a dental or medical SR&ED claim, get a second opinion from your existing accountant or another independent CPA before signing anything. The CRA’s general advice is the same: consult resources directly rather than relying on a third party’s representation that you qualify.

Genuine medical and dental research absolutely can qualify for SR&ED, but the work has to actually be research, the documentation has to support the eligibility tests, and the claim has to come out of an honest analysis of the practice’s activities, not out of a marketing arrangement.

How the Filing Works

SR&ED filing for a Medical Professional Corporation (MPC) follows the same structure as a standard corporate SR&ED claim, but medical claims usually face greater scrutiny around physician time allocation and funding separation.

• The core federal filing includes Form T661, which contains the technical narrative and eligible SR&ED expenditures, along with Schedule T2SCH31, which calculates the federal Investment Tax Credit (ITC) filed with the corporation’s T2 return.
• Ontario MPCs may also qualify for provincial incentives, including the Ontario Innovation Tax Credit (8% refundable for qualifying corporations) and the Ontario Research and Development Tax Credit (3.5% non-refundable).
• The most difficult aspect of medical SR&ED claims is expenditure allocation because clinician-investigators often divide their time between MPC-funded research, hospital-employed clinical practice, university teaching, and externally funded studies. Only the portion directly connected to MPC-funded SR&ED work is eligible.
• CRA expects allocation methods to be defensible and supported by contemporaneous documentation, including activity-based time tracking, payroll support, project records, and clear accounting separation between MPC activities and related-party or hospital-funded work.
• The filing deadline is strict. SR&ED claims must be submitted within 18 months of the corporation’s fiscal year-end. For example, an MPC with a December 31 year-end must file its claim by June 30 of the second following year.
• CRA does not grant extensions to the SR&ED filing deadline, which means claims should be planned and documented throughout the year rather than assembled shortly before filing.

The Double-Counting Risk

The single most common reason medical SR&ED claims fail under CRA review is double-counting research that has already been funded elsewhere.

A clinician-investigator working at a teaching hospital is typically involved with several entities at once. Hospital employer. MPC owner. University affiliate. Possibly a grant recipient through CIHR, NSERC, a hospital foundation, or an industry sponsor. Each relationship covers some portion of the practitioner’s work, and SR&ED only applies to the portion that the MPC directly funded.

Two scenarios that cause problems:

Grant-funded research. If a study is funded by an external grant; CIHR, a hospital research fund, a pharmaceutical sponsor, the funded portion of the work cannot also generate an SR&ED claim by the MPC. Grant funding reduces or eliminates the claimable expenditure base. We frequently see initial claim drafts that include grant-funded time; cleaning this up is most of the SR&ED-allocation work.

Hospital-employed time. Time spent on research activities while employed by the hospital (and paid by the hospital) belongs to the hospital, not the MPC. Even if the work is “research,” the MPC cannot claim time it didn’t pay for.

The defensible approach: clean time-tracking that separates MPC-funded research time from hospital-employed time, from grant-funded time, from clinical practice time. The CRA looks at exactly this, especially on claims of any meaningful size.

What Documentation Medical SR&ED Claims Need

The CRA expects contemporaneous documentation, records created during the research, not reconstructed afterward. For medical SR&ED specifically:

• Study protocols and ethics approval letters for any clinical research, dated to show when the study began
• A clear research question or hypothesis documented at the start of the work, in a form that supports the eligibility tests
• Time logs separating MPC-funded research time from hospital-employed, university-affiliated, and grant-funded time; by activity, by date, by hour, where practical
• Records of materials, supplies, and equipment paid for by the MPC, distinct from items provided by the hospital or university
• Outcome data and analysis showing the systematic investigation actually took place
• Records of any grants, sponsorships, or external funding that touched the research, so the claim can be properly netted
• Publications, conference presentations, or internal reports documenting what was learned (helpful, not required)

The most common documentation problem we see in medical SR&ED is the absence of time records. Clinicians who don’t formally track their time by activity end up either underclaiming (because they can’t substantiate hours) or facing reduction (because the CRA can’t reconcile their claim with their hospital employment records). Building a time-tracking discipline into the practice is worth more than any single filing.

SR&ED in the Broader MPC Tax Picture

A medical SR&ED claim doesn’t sit in isolation. For an incorporated physician or dentist, the credit interacts with the rest of the MPC’s tax position, the small business deduction, dividend strategy, retained earnings, retirement planning, and (where applicable) the lifetime capital gains exemption.

A few interactions worth flagging:

• The SR&ED credit is itself taxable in the year it is received. The net after-tax benefit is still substantial, but the gross number overstates the cash impact.
• The refundable portion is cash that lands in the MPC, not in the practitioner personally. Getting that cash to the practitioner involves the usual MPC distribution decisions: salary, dividends, retained earnings, each with different tax consequences.
• For larger MPCs, the taxable capital phase-out (now $15M–$75M under Bill C-15) determines whether the enhanced 35% rate or the basic 15% rate applies. Most clinical practices sit well below the threshold, but the rules matter for larger group practices.

The general principle: a SR&ED claim that’s right for the practitioner accounts for what happens after the credit is received, not just for the credit itself.

Case Study

A Specialist Practice Considering Its First SR&ED Claim

A specialist physician with an established Medical Professional Corporation contacted us after being approached by a third party about SR&ED. The third party had told the practice that the specialist’s clinical work, using a relatively new diagnostic approach on certain patients and documenting outcomes, could generate a substantial SR&ED refund. The third party was offering to prepare the claim on a contingency basis.

Problem

The practice had two questions: 

• First, was the work actually SR&ED-eligible? 
• Second, was the third party’s arrangement the right way to proceed?

How we approached it

We worked through the activity with the specialist directly. The diagnostic approach was clinically novel for the practice but well-documented in the broader literature; the specialist was adopting a published technique, not investigating an unanswered question. Outcome documentation was being collected, but as quality-improvement data, not as a structured study with a pre-specified research question or hypothesis. 

Our conclusion

The activity, as it stood, didn’t meet the SR&ED eligibility tests. We advised against filing.

The same conversation, however, surfaced a separate piece of work the specialist was doing in collaboration with a hospital research unit, investigating a novel surgical technique not previously documented in the literature, with a formal study design and pre-registered endpoints. That work, partly funded by the MPC and partly by a hospital grant, could potentially support an SR&ED claim on the MPC-funded portion, once we’d properly allocated the time, materials, and grant offsets. That became the basis of a careful first claim filed the following year.

What we learned

The third party’s pitch had targeted the wrong activity entirely. The actual SR&ED-eligible work in the practice was a different research program, one that the specialist hadn’t thought to mention until we asked. Medical SR&ED is fact-specific enough that getting the analysis wrong in either direction (filing for work that doesn’t qualify, or missing work that does) is the rule, not the exception.

How SRJ CPA Helps Medical and Dental Practices With SR&ED

Medical SR&ED requires a careful, fact-specific analysis, not a templated filing. The CRA’s increasing scrutiny of medical and dental claims, the archiving of the dedicated MPC guidance, and the public warning about dental tax schemes all point in the same direction: claims need to be built on honest eligibility analysis and clean documentation, or they shouldn’t be built at all.

SRJ Chartered Professional Accountants is a Toronto and Mississauga-based CPA firm working with incorporated physicians, dentists, surgeons, and other medical specialists across Ontario. We handle the MPC’s corporate tax position, SR&ED claims where the underlying work genuinely qualifies, and ongoing planning around the practice’s broader tax position as a single integrated engagement. If a third party has approached your practice about SR&ED, we are happy to provide a second opinion before any filing decision is made.

Contact SRJ CPA today.

Frequently Asked Questions

Can a doctor claim SR&ED in Canada?

Yes, when the doctor is incorporated through a Medical Professional Corporation (or another eligible entity) and the MPC has directly undertaken and paid for genuine clinical research that meets the SR&ED eligibility tests, scientific or technological advancement, scientific or technological uncertainty, and systematic investigation. Routine clinical practice does not qualify, even at the leading edge of medicine.

What kinds of medical work typically qualify for SR&ED?

Clinical trials with formal study design, development and validation of new surgical techniques, novel diagnostic approaches, new treatment protocols investigating questions not yet answered in the literature, medical device development by an incorporated physician, and biomarker or assay development work. The common thread: structured investigation of a question that existing knowledge can’t answer.

What kinds of medical work generally don’t qualify?

Adopting an existing technique into your own practice, using a new commercial drug or device on patients without a structured study design, quality improvement work without a research question, routine patient care even at high skill levels, and research that has been funded by an external party (grants, sponsors, hospital research funds), the funded portion isn’t claimable by the MPC.

What about dental SR&ED, is it the same?

The eligibility rules are the same, but the practical landscape is different. The CRA issued a public warning in late 2025 about dental SR&ED tax schemes, specifically, third parties marketing claims based on using commercial products on patients as part of a “study.” Dental research absolutely can qualify when it’s genuine, but practitioners approached by third parties offering SR&ED-on-contingency arrangements should get an independent second opinion before signing anything.

Has the CRA updated its guidance on medical SR&ED recently?

Yes. The CRA’s dedicated guidance page for physicians and medical professional corporations was archived in 2024–2025 and is no longer being updated. Medical SR&ED claims are now evaluated under the CRA’s general SR&ED rules and policies. The eligibility tests haven’t changed; the standalone medical framework has.

What rate does an MPC get on a successful SR&ED claim?

If the MPC qualifies as a Canadian-controlled private corporation under the taxable capital phase-out (now $15M–$75M under Bill C-15), it gets the 35% enhanced credit, fully refundable, on the first $6 million of qualifying expenditures per year. Most medical practices sit well within this threshold. Above $6 million, or for MPCs that don’t qualify for the enhanced rate, the basic 15% non-refundable credit applies with a 20-year carryforward.

Can I claim SR&ED on time I spent doing research at the hospital?

Only on the portion of time the MPC directly paid for. Time spent on research while employed by and paid by the hospital belongs to the hospital, not the MPC. The same applies to research funded by grants, the funded portion reduces or eliminates the MPC’s claimable expenditure base. Clean time-tracking by activity is what makes a defensible claim possible.

What’s the deadline to file a medical SR&ED claim?

18 months after the MPC’s fiscal year end. The CRA does not grant extensions to this deadline in any case we’ve seen. For a December 31 year end, the deadline is June 30 of the second following year. Plan SR&ED work as part of the year-end process, not in the weeks before filing.