This page addresses what should be reviewed before filing an R&D tax credit claim. A pre-filing review covers activities, QREs, documentation, Form 6765, and elections. It helps identify issues before filing. This page is educational and is not individualized advice. For the general framework, see our page on what the R&D tax credit is.
Key Considerations
The analysis depends on the specific facts and circumstances. Under the four-part test, qualified research 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 development — evaluating alternative approaches to resolve uncertainty about whether a new approach can achieve the required performance.
- New arrangement — evaluating alternative approaches to resolve uncertainty about whether a new arrangement can achieve the required outcome.
- New application — evaluating alternative approaches to resolve uncertainty about whether an existing approach can perform in a new context.
- New requirement — evaluating alternative approaches to resolve uncertainty about whether a new requirement can be met.
Educational Purpose
This page is educational and does not replace professional tax judgment. R&D Ledger provides tools and content to help organize and document R&D activities, but final qualification and filing decisions require professional review. For more, see our page on CPA R&D tax credit review.
Hypothetical Example
Consider a company that is evaluating a new approach and is uncertain whether any available method can achieve the required outcome. The company evaluates alternative approaches, tests each, and systematically varies the approach to resolve the uncertainty. This may warrant review as qualified research.
By contrast, if the same company performs routine work using established methods, that is routine work, 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 this work include records identifying the uncertainty and alternative approaches, test results, and records of how results informed decisions. For more, see our page on R&D tax credit documentation.
Key Takeaway
A pre-filing review covers activities, QREs, documentation, Form 6765, and elections. It helps identify issues before filing. Because the analysis is fact-specific, professional review is appropriate before claiming the credit.