Two tracks, three groups
The federal track covers the credit under IRC section 41. The state track applies only where the state runs its own program. Questions are grouped by who answers them:
- Project questions, answered once per business component: F1 to F8 and S1 to S2. They cover the business component, technical uncertainty, the process of experimentation, time allocation, wage reconciliation, contemporaneous documentation, supplies and contract research, and where the work was performed.
- Company-wide questions, answered once from the forms and included in every project's response: F9 and F10 on the base amount and elections, and S3 to S7 on state reconciliation, forms, entity, carryforward and registration.
- State-specific questions, where a state program adds its own, shown for specialist review.
What each question carries
- The question, in examiner terms.
- The evidence it expects, such as a payroll register or test logs.
- Its weight in the score, and whether it is a red-flag question.
- After analysis: a Strong, Weak or Missing rating, the matched files and the reason.
Illustrative questions
| ID | Question | Expected evidence |
|---|---|---|
| F2 | What technical uncertainty existed at the start of each business component? | Kickoff materials, early tickets, risk registers |
| F4 | Show how each employee's time was allocated between qualified and non-qualified activities. | Time records by project and activity |
| F8 | Provide contracts for contract research, showing who bore the economic risk and held substantial rights. | Signed contracts and SOWs |
| S2 | Show how wages were apportioned between the state and other locations. | Payroll by work location, remote work records |
Terminology
The questions use IRS research credit terminology: IRC section 41, business components, the four-part test, qualified research expenses, Form 6765 and Information Document Requests. Federal and state tracks are kept separate throughout.