A common question from electronics manufacturers is whether power-electronics development can qualify as research and development for the federal R&D tax credit under Section 41. The short answer is that power-electronics development may constitute qualified research when it evaluates alternatives to resolve a technical uncertainty. Routine power-supply design using established topologies generally is not qualified research. This page explains the framework in general terms. It is educational and is not individualized advice. For the foundational framework, see our page on qualified research.
When Power-Electronics Development May Warrant Review
Power-electronics development may warrant review when the work involves a genuine technical uncertainty and a process of experimentation. Under the four-part test, the work must be for a permitted purpose, be technological in nature, be intended to eliminate uncertainty, and be conducted through a process of experimentation.
Common scenarios that may warrant review include:
- New topology — evaluating alternative topologies to resolve uncertainty about whether a new topology can achieve the required efficiency.
- New component — testing alternative components to resolve uncertainty about whether a new component can achieve the required performance.
- New control — evaluating alternative control approaches to resolve uncertainty about whether a new control can achieve the required regulation.
- New application — testing alternative approaches to resolve uncertainty about whether power electronics can perform in a new environment.
Routine Design vs. Development
A central distinction is between routine power-supply design and power-electronics development:
- Routine design — designing a power supply using an established topology and known components for a known application. There is no technical uncertainty. This is design, not research.
- Development — developing new power-electronics approaches where there is a technical uncertainty about whether the design can achieve the required performance. This may warrant review.
Hypothetical Example
Consider a company that is developing a new high-efficiency power converter and is uncertain whether any available topology can achieve the required efficiency at the required power level. The company evaluates alternative topologies, tests each, and systematically varies the approach to resolve the uncertainty. This may warrant review as qualified research.
By contrast, if the same company designs a standard buck converter using an established topology, that is routine design, not research.
This example is illustrative only and does not state that the activity definitely qualifies.
Documentation That May Help
Records that can help support power-electronics development claims include design records identifying the uncertainty and alternative approaches, efficiency and performance test results, and records of how results informed design decisions. For more, see our page on R&D tax credit documentation.
Key Takeaway
Power-electronics development may constitute qualified research when it evaluates alternatives to resolve a technical uncertainty. Routine power-supply design using established topologies generally is not qualified research. Because the distinction is fact-specific, professional review is appropriate before claiming the credit.