Canada: Claim preparer information penalty | Research Credit Integrity Alliance

Canada attaches a specific penalty to the claim preparer information on an SR&ED claim. This page sets out the text of the penalty, who it applies to, the defence available to preparers, and how the CRA describes it.

Summary

Feature	What the official sources say
Provision	Income Tax Act, subsection 162(5.1), with the defence in 162(5.2) and definitions in 162(5.3).1
Amount	$1,000.1
Trigger	A false statement or omission in respect of claim preparer information required in an SR&ED form.1
Who is liable	Every person or partnership who makes, or participates in, assents to or acquiesces in the making of, the false statement or omission, jointly and severally, or solidarily, with any claim preparer of the form.1
Defence	A claim preparer is not liable if it exercised the care, diligence and skill of a reasonably prudent person in comparable circumstances.1
Applies to	Claims filed on or after January 1, 2014.2

The text of the penalty

Subsection 162(5.1) provides that every person or partnership who makes, or participates in, assents to or acquiesces in the making of, a false statement or omission in respect of claim preparer information required to be included in an SR&ED form is jointly and severally, or solidarily, liable, together with any claim preparer of the form, to a penalty equal to $1,000.1

Three defined terms set the scope of the penalty.1

An SR&ED form is a prescribed form required to be filed under subsection 37(11). That is Form T661.13
Claim preparer information is prescribed information about the identity of the claim preparer, if any, and the arrangement under which the claim preparer agrees to accept consideration for preparing the form.1
A claim preparer is a person or partnership who agrees to accept consideration to prepare, or assist in the preparation of, the form, other than an employee acting in the course of employment.1

The penalty therefore covers both who prepared the claim and how they were paid.1 The CRA's form states that the penalty may be assessed if the information about the claim preparers and billing arrangements is missing, incomplete or inaccurate.3

Who is liable

Liability under subsection 162(5.1) falls on the person or partnership who makes, or participates in, assents to or acquiesces in the false statement or omission, and on any claim preparer of the form, jointly and severally, or solidarily.1

The CRA's guide to Form T661 states that if a claim preparer has prepared or assisted in the preparation of the claim, the claim preparer will be jointly and severally, or solidarily, liable with the claimant for the penalty.4 The CRA's summary of the Budget 2013 measure states the same: the taxpayer and the preparer will be jointly and severally, or solidarily, liable.2

The due diligence defence

Subsection 162(5.2) provides that a claim preparer of an SR&ED form is not liable for the penalty in respect of a false statement or omission if the claim preparer has exercised the degree of care, diligence and skill to prevent it that a reasonably prudent person would have exercised in comparable circumstances.1 The subsection refers only to the claim preparer.1 It does not state a corresponding defence for the claimant.

Per claim, not per line

The CRA's guide states that a penalty of $1,000 may be assessed in respect of each SR&ED claim for which prescribed information about the claim preparers is missing, incomplete or inaccurate.4 The CRA's summary of the Budget 2013 measure also describes the penalty as $1,000 per SR&ED claim.2

How it relates to other consequences

The claim preparer information penalty is separate from the consequences of missing the other prescribed information on Form T661. If prescribed information about an expenditure is missing from the form, no deduction may be claimed for that expenditure under subsection 37(1).5 The CRA states that if an expenditure is not reported on Form T661 by the SR&ED reporting deadline, the claimant will not be entitled to the SR&ED incentives for it.4

The claim preparer information penalty is a fixed amount. It does not depend on the size of the claim or the fee.1 Other penalties in the Income Tax Act, such as the gross negligence penalty in subsection 163(2) and the third party penalties in section 163.2, are calculated differently and apply to false statements generally.67 See the penalties page.

How the CRA has described it

When it introduced Part 9 in 2013, the CRA stated that a $1,000 penalty may apply to each claim with missing, incomplete or inaccurate preparer information, and that the penalty applies to claims filed on or after the later of January 1, 2014 and the day the enacting legislation received Royal Assent.8 The CRA's Budget 2013 page records Royal Assent on December 12, 2013.2

In its 2023 guidance to businesses, the CRA asked claimants to provide the information requested for each preparer in Part 9, stated that this is a requirement under subsection 162(5.1), and advised them to be wary of any preparer who asks them to omit this information.9 A CRA news item on the SR&ED program also states that failure to provide complete and accurate Part 9 information may result in a $1,000 penalty.10

Court decisions

No decision of the Tax Court of Canada applying subsection 162(5.1) was identified for this page. No CRA statistics on how often the penalty has been assessed were identified.

Sources

Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 162(5.1), (5.2) and (5.3). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-162.html (accessed 11 October 2026). Back
Canada Revenue Agency, Budget 2013, Scientific Research and Experimental Development (SR&ED) Tax Incentive Program, section on claim preparer information and penalty. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2013/budget-2013-scientific-research-experimental-development-tax-incentive-program.html (accessed 11 October 2026). Back
Canada Revenue Agency, Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, T661 E (26), Part 9, Claim preparer information. https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t661/t661-26e.pdf (accessed 11 October 2026). Back
Canada Revenue Agency, T4088, Guide to Form T661 (T4088(E) Rev. 20), sections on the SR&ED reporting deadline and Part 9, Claim preparer information. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4088/guide-form-t661-scientific-research-experimental-development-expenditures-claim-guide-form-t661.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 37(11), (11.1) and (12). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-37.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsection 163(2). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-163.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), section 163.2, subsections 163.2(2) to (6). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-163.2.html (accessed 11 October 2026). Back
Canada Revenue Agency, SR&ED T661 Claim Form, 2013 Revision, Claim preparer information (October 31, 2013). https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/whats-new-program/t661-claim-form-2013-revision-claim-preparer-information.html (accessed 11 October 2026). Back
Canada Revenue Agency, Are you preparing to claim SR&ED tax incentives? Here's what you need to know (tax tip, May 30, 2023). https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/preparing-to-claim-sred-tax-incentives-what-you-need-to-know.html (accessed 11 October 2026). Back
Canada Revenue Agency, SR&ED news and updates, item "Dentistry professionals: look out for third parties promising access to SR&ED tax incentives". https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/sred-updates.html (accessed 11 October 2026). Back