The Treasury Department released a new regulation to make it easier for taxpayers to claim a reduced research tax credit. While the two tax provisions are not identical, expenses that qualify for the research tax credit may also qualify for the research tax deduction. Taxpayers can claim both; however, a taxpayer must make an election to reduce its research tax credit to claim the research tax deduction. Currently, a taxpayer must make this election on an original tax return. The proposed regulation will allow a taxpayer to make the election directly on the Form 6765 – which is the form filed with an income tax return used to claim a research tax credit. The proposed regulation is effective when it is published in the Federal Register.

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