Criteria for Qualifying
for the R&D Tax Credit

Criteria for Qualifying
for the R&D Tax Credit

The Four-Part Test

1

Do Activities Eliminate Uncertainty?

Activities must focus on the discovery of information that eliminates uncertainty regarding the improvement or development of a product or process.

2

Do Activities Rely on Hard Sciences?

Activities must rely on the principles of engineering, computer science, or the physical or biological sciences.

3

Are Activities Designated for a Permitted Purpose?

Activities must relate to the development of a new or improved product or process, also known as a business component. Business components must be designated for a permitted purpose, such as to increase reliability, functionality, performance, or quality.

4

Do Activities Involve Experimentation?

Activities must incorporate the process of experimentation in which alternatives are evaluated through modeling, simulation, testing, and trial-and-error methodology.

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