Software companies have specific considerations when evaluating an R&D tax credit consultant. The consultant must understand software development — architecture, technical uncertainty, experiments, and the internal-use-software rules — to conduct a credible analysis. This page explains what software companies should ask. It is educational and is not individualized advice, and it does not rank providers. For the underlying framework, see our page on software development and the R&D tax credit.
Technical Interview Capability
Ask whether the consultant can conduct credible technical interviews with software engineers. Does the consultant understand software architecture, development processes, and the technical questions that arise in software development? A consultant who does not understand software may struggle to identify the technical uncertainty and process of experimentation that the qualified-research analysis requires. For more on the interview process, see our page on R&D tax credit study employee interviews.
Understanding of Architecture and Development
Ask whether the consultant understands software architecture and development practices. Can the consultant evaluate whether a team evaluated alternative architectures, tested competing approaches, or resolved a genuine technical uncertainty? The qualified-research analysis depends on understanding the technical work, so the consultant's technical depth matters. For more on the technical framework, see our page on process of experimentation.
Documentation Approach
Ask how the consultant documents software-development activities. Does the consultant produce project-level documentation that describes the business component, the technical uncertainty, the alternatives, and the experiments? Does the consultant connect the documentation to the business's actual development process? For more on documentation, see our page on R&D project documentation.
Employee Allocation
Ask how the consultant handles employee allocation. In software companies, developers often work on multiple projects, so allocation is particularly important. Does the consultant have a methodology for allocating wages across qualified research and other work, based on the developer's actual activities? For more on the wage framework, see our page on R&D tax credit employee wages.
Internal-Use Software Considerations
Ask whether the consultant understands the internal-use-software rules. Software developed primarily for the company's internal use is subject to additional requirements beyond the four-part test, including a high threshold of innovation. The consultant should be able to analyze whether a project is internal-use or interacts with third parties, as this affects the analysis. For more on this topic, see our page on internal-use software.
Engineering Evidence
Ask how the consultant uses engineering evidence — design documents, architecture diagrams, test results, and repository and ticket data. Does the consultant connect this evidence to the technical uncertainty and process of experimentation? Does the consultant understand that repository and ticket evidence does not automatically prove qualification? For more on evidence, see our page on R&D evidence tracking.
Filing Responsibility
Ask whether the consultant files Form 6765 and the tax return, or whether the consultant produces workpapers for the business's CPA. Some consultants file; others do not. If the consultant does not file, the business's CPA must handle filing. For more on the form, see our page on Form 6765.
Questions to Ask
When evaluating a consultant for software development, consider asking:
- Do you have experience with software companies like ours?
- Who conducts the technical interviews, and what is their technical background?
- How do you document software-development activities?
- How do you handle employee allocation for developers who work on multiple projects?
- How do you analyze internal-use software?
- How do you use repository and ticket evidence?
- Do you file Form 6765, or do you produce workpapers for our CPA?
- What examination support do you provide?
For more on choosing a provider broadly, see our page on how to choose an R&D tax credit provider.
What a Consultant Does Not Guarantee
A consultant does not guarantee that the business's software-development activities qualify for the credit. Qualification depends on whether the activities satisfy the four-part test — a facts-and-circumstances determination. A consultant analyzes the activities and provides professional guidance, but the outcome depends on the specific facts. For more on the qualification framework, see our page on qualified research.
Key Takeaway
Software companies should evaluate R&D tax credit consultants on their technical interview capability, understanding of architecture and development, documentation approach, employee allocation methodology, internal-use-software expertise, use of engineering evidence, and filing responsibility. A consultant does not guarantee qualification, and the right choice depends on the business's specific facts. For more on comparing consultants, see our page on how to compare R&D tax credit consulting firms.