What is the R&D tax credit?
The federal R&D tax credit — formally the Credit for Increasing Research Activities under Section 41 — is a tax benefit associated with qualified research activities and qualified research expenses. For more, see what the R&D tax credit is.
What is qualified research?
Qualified research is the defined category of activity that may be taken into account for the credit under Section 41, requiring a permitted purpose, a technological process of inquiry, the elimination of uncertainty, and a process of experimentation. For more, see qualified research.
What is the four-part test?
The four-part test is the framework for analyzing qualified research: permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation. For more, see the four-part test.
What are qualified research expenses?
Qualified research expenses are the costs that may be taken into account in computing the credit — primarily certain wages, certain supplies, and certain contract research. For more, see qualified research expenses.
Can employee wages be qualified research expenses?
Certain wages of employees who perform or directly support qualified research may be taken into account. Job title alone does not determine treatment. For more, see R&D tax credit employee wages.
Can contractor costs be qualified research expenses?
Certain amounts paid for qualified research performed on behalf of the taxpayer may be taken into account, subject to economic-risk and rights-to-results rules. For more, see R&D tax credit contractor costs.
Can supplies be qualified research expenses?
Certain supplies — tangible property other than land and depreciable property, used in qualified research — may be taken into account. For more, see R&D tax credit supplies.
What is Form 6765?
Form 6765, Credit for Increasing Research Activities, is the IRS form used to figure and claim the credit and make certain elections. For more, see Form 6765.
What is the R&D payroll tax credit?
A qualified small business may elect to apply a portion of the research credit against payroll tax rather than income tax, subject to eligibility rules. For more, see the R&D payroll tax credit.
Why does documentation matter?
Because qualification depends on specific activities, costs, and facts, contemporaneous records help substantiate a credit claim. For more, see R&D tax credit documentation.
Does R&D Ledger determine whether a company qualifies?
No. Content on R&D Ledger Learn is educational and is not a determination that any particular activity, cost, or taxpayer qualifies. Professional review is appropriate for specific situations.