SR&ED for medtech companies
SR&ED for medtech companies.
Device, diagnostic, imaging, digital health, and medical software teams often perform eligible experimental development without labelling it SR&ED. The strongest claims isolate the technical uncertainty, the test cycle, and the company costs connected to that work.
A hard project is not enough. Look for the technical problem that forced the experiments.
A product can be novel and still contain no SR&ED. It can also look ordinary from the outside while the team is solving a real technical limitation in sensing, signal processing, assay performance, materials, imaging, manufacturing, or software.
The useful question is not whether the product was innovative. It is whether competent professionals could resolve the specific problem using available knowledge, and whether the team used experiments or analysis to work through it.
Where to look
The claim usually begins in the engineering record
A technical limit stopped progress
Accuracy, stability, sensitivity, latency, biocompatibility, reproducibility, or another measurable constraint could not be solved by standard practice.
The team ran a test loop
A hypothesis or technical objective led to prototypes, experiments, measurements, analysis, and changes in the next attempt.
The failures taught you something
Unexpected results narrowed the possible solution or changed the technical approach. A commercial failure is not required.
The company paid the work
Payroll, materials, and qualifying contracts can be traced to the eligible period and supported by financial records.
Claim the experimental work, not the whole product roadmap.
Development projects mix eligible work with routine engineering and commercial execution. Drawing that boundary clearly makes the claim easier to understand and defend.
Work to examine
- Experiments addressing device, software, assay, imaging, or process uncertainty
- Directly related support work that is commensurate with the eligible experiments
- Eligible salary, consumed materials, and qualifying arm's-length contracts
- Failed prototypes and approaches that contributed to the technical investigation
Work to keep outside the claim
- Routine coding, configuration, testing, or debugging using established methods
- Ordinary quality assurance, certification, and regulatory administration
- Market research, sales work, cosmetic design, and commercial rollout
- Product improvements that did not require a scientific or technological advance
FAQ
Medtech SR&ED questions
What medtech work may qualify for SR&ED?
Work may qualify when a device, diagnostic, imaging, software, or production problem could not be resolved using available knowledge and the team used a systematic investigation or search to address it.
Does routine verification or validation qualify?
Routine testing against known requirements generally does not qualify by itself. Experimental work within verification or validation may qualify when it addresses an unresolved technological limitation.
Can failed prototypes be included?
Yes. A failed prototype can be part of eligible work when it tested a hypothesis or technical objective and contributed to the systematic investigation. Commercial failure is not required.
Which medtech development costs may be included?
Depending on the facts, eligible expenditures may include salary and wages, materials consumed or transformed, and qualifying arm's-length contract payments connected to the SR&ED work.
Related articles
Official sources
Program guidance reviewed August 1, 2026.
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