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Claiming the R&D Tax Credit: IRS Rules, Substantiation of QRAs and QREs, Offsetting Payroll Tax, AMT Liabilities

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Thursday, September 16, 2021

Recorded event now available

or call 1-800-926-7926

This course will provide tax counsel and advisers a thorough and practical guide to Section 41 Research and Development (R&D) Income Tax Credits. The panel will identify activities treated as qualified research activities (QRAs), offer guidance on documenting and claiming the credit, outline strategies to allocate employee activities to QRAs, and other key items for using R&D Income Tax Credits and the IRS's approach to auditing R&D Income Tax Credits.

Description

For many businesses, the R&D tax credit is one of the most underutilized of all tax benefits. When claiming the R&D credit, determining what activities constitute qualified research activities (QRAs) and calculating qualified research expenses (QREs) can be challenging.

Section 41 allows a credit for a percentage of a QRE that a taxpayer incurs engaging in research activities. The Code provides a four-part test to determine whether an activity can be considered a QRA. Expenditures, including wage expenses with sufficient nexus to the QRA, can be included in calculating the expenditure base. However, substantiating that an activity qualifies as a QRA can still be complex, and tax professionals must know the standards and limits in utilizing this important and overlooked credit.

Listen as our experienced panel provides a thorough and practical review of calculating, claiming, and substantiating a Section 41 R&D credit.

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Outline

  1. Overview of Section 41 R&D credit
  2. Determining QRAs
  3. Sampling and allocation methods
  4. Documentation and substantiation of credits
  5. Applying for credits against AMT or payroll tax liability
  6. IRS approach to auditing R&D tax credits

Benefits

The panel will discuss these and other important topics:

  • The four-part test to determine whether an activity can be considered a QRA for purposes of claiming a Section 41 R&D credit
  • Documentation and substantiation requirements
  • Sampling strategies for including wage QREs and other indirect costs in the credit calculation
  • Best practices for businesses claiming a Section 41 R&D credit
  • Recent court cases and rulings

Faculty

Mitchell, Kreig
Kreig D. Mitchell, LLM, JD

Attorney/Managing Director
Mitchell Tax Law

Mr. Mitchell focuses on various state and federal tax matters and related business and probate matters, including tax...  |  Read More

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