New Requirements for claiming research tax credit.
In September 2021, the IRS Office of Counsel has determined the requirements for a sufficient research & development (R&D) credit claim.
02/09/2022
In September 2021, the IRS Office of Counsel has determined the requirements for a sufficient research & development (R&D) credit claim. To be considered sufficient, a refund claim for an R&D credit must, at minimum:
- Identify all the business components to which the research credit claim relates for that year.
- Provide the total qualified expenses : employee wage, supply, and contract research for the claim year.
NB – For each business component:
- Identify all research activities performed;
- Identify all individuals who performed each research activity;
- Identify all the information each individual sought to discover.
The detailed information that the IRS now requires will likely have a significant impact on many companies. Some businesses may be discouraged from seeking legitimate R&D credits.
The R&D tax credit is the Federal Government’s tax break to foster innovation and technological advancement.
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