Eligibility and documentation checklists

Checklist one

• The research is performed in the United States (including Puerto Rico and US possessions); only research conducted there counts, including research done by contractors.
• The work relates to a new or improved business component (product, process, software, technique, formula or invention) and aims to improve its function, performance, reliability or quality.
• The process of experimentation fundamentally relies on principles of the physical or biological sciences, engineering or computer science, rather than aesthetics, market research or management judgement.
• Technical uncertainty existed at the start of the project about capability, method or design.
• Substantially all (80% or more) of the activities for each business component involved evaluating alternatives through modelling, simulation, prototyping or systematic trial and error.
• The business retains financial risk and substantial rights in the results.
• The activity is not excluded research: not routine quality control or testing, research after the start of commercial production, adaptation or duplication of an existing business component, surveys or market research, social sciences, research conducted outside the United States, or research funded by another person.
• Prior-year returns are still within the refund claim period (generally three years from filing or two years from payment, IRC §6511), and any research credit refund claim will include the three items of information the IRS requires (business components, research activities for each, and total qualified wage, supply and contract research expenses) with a signed declaration; through January 10, 2027 a deficient claim can generally be perfected within 45 days. Partnerships under the centralized audit regime must file an administrative adjustment request rather than an amended return.

Checklist two

• Project-level narratives describing uncertainty, alternatives evaluated and outcomes.
• Payroll records identifying who performed, directly supervised or directly supported the research.
• Time allocation evidence, whether timesheets, sprint records or a reasonable allocation method supported by records made during the work.
• General ledger detail for supplies consumed in the research process.
• Contracts with third-party developers showing risk allocation and rights in the results.
• Design reviews, test plans, test results and failure analyses.
• Version control history, issue tracker records or lab notebooks contemporaneous with the work.
• Invoices for cloud computing or other computer use in the conduct of qualified research, such as development and testing environments (production hosting and general IT costs do not qualify).
• Board or management approvals evidencing the project scope and objectives.
• A written methodology memorandum explaining the base amount and calculation method chosen.