---
name: us-r-and-d-section-174-and-41
description: "Tier 2 US federal content skill for the §174 mandatory R&E capitalization regime (TCJA, eff. 1/1/2022, 5-year domestic / 15-year foreign amortization, half-year convention) and the §41 R&D Credit (Regular Credit 20% / Alternative Simplified Credit 14%, four-part test, contract research at 65%, IUS software hurdle), including the §41(h) payroll tax credit election for Qualified Small Businesses (< $5M gross, no prior receipts beyond Immediate expensing unless §174A(c) amortization election is made) — increased to $500k by IRA 2022 — applied against Form 941 via Form 8974. Tax year 2025 (§174 capitalization remains law absent year-end extender). Federal only."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/us-r-and-d-section-174-and-41"
  jurisdiction: "US"
  tax_year: "2026"
  last_updated: "2026-10-16"
  authored_by: "Michael Cutajar and the OpenAccountants team"
  trust_label: "Built by Michael Cutajar and the OpenAccountants team"
  review_status: "pending_review"
---

# US research costs: §174A expensing, §174 foreign amortization and the §41 research credit

Figures are for tax year 2026, with a dated section for 2025 returns still being filed on extension. This skill covers federal income tax treatment of research or experimental (R&E) costs after the One Big Beautiful Bill Act (P.L. 119-21), and the §41 credit for increasing research activities, including the payroll-tax election for qualified small businesses. It is for sole proprietors, partnerships, S corporations and C corporations that develop products, processes or software. Federal law only; states decide their own conformity.

Law in one paragraph: domestic R&E paid or incurred in tax years beginning after 31 December 2024 is deductible when paid or incurred under §174A(a), unless the taxpayer elects to amortize it under §174A(c). Foreign R&E stays capitalized and amortized over 15 years under §174. Domestic R&E that was capitalized for 2022-2024 under the old TCJA rule has its own transition choices. The §41 credit is a separate computation on a narrower set of costs, and §280C links the two. [§174A](https://www.law.cornell.edu/uscode/text/26/174A); [§174](https://www.law.cornell.edu/uscode/text/26/174); [Rev. Proc. 2025-28](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)

## Ask the client first

- Tax year and year-end: calendar or fiscal? The first taxable year beginning after 31 December 2024 is the transition year. For a fiscal-year taxpayer it may end in 2026.
- Entity type, and whether it belongs to a controlled group or businesses under common control. Group members compute the credit together.
- Where each person or contractor physically performed the research. Research outside the United States, Puerto Rico and US possessions is foreign.
- Any domestic R&E capitalized under TCJA §174 for tax years beginning in 2022-2024, and the remaining unamortized balance at the start of the transition year.
- Whether the 2025 return (or the first post-2024 year's return) has already been filed, and how it treated domestic R&E and the old balance.
- Whether any small-business retroactive election or amended returns for 2022-2024 were filed by 6 July 2026.
- For the credit: QREs by year for the three preceding tax years, the method used before (regular or ASC), and whether a §280C(c)(2) election was made in past years.
- Payroll records, time records by project and person, contractor agreements (payment terms, who owns the results, where work was done), and supply and cloud-computing invoices.
- For a payroll-election candidate: gross receipts for every year since the business started (including predecessors), current-year gross receipts, the number of prior years it already made a §41(h) election, and whether any income tax liability can absorb the credit.

## The method, step by step

1. **Identify R&E costs.** Costs paid or incurred in connection with the trade or business for research or experimentation count. Any amount paid or incurred to develop software counts. Land, and property subject to depreciation or depletion, do not; the depreciation allowances on research property do count as expenditures. Mineral exploration costs are excluded. [§174A(d)](https://www.law.cornell.edu/uscode/text/26/174A)
2. **Split domestic from foreign by where the research is performed.** Foreign means research attributable to foreign research within §41(d)(4)(F), that is, research conducted outside the United States, Puerto Rico or a US possession. Allocate mixed-location work with time and location records. [§174(b)](https://www.law.cornell.edu/uscode/text/26/174); [§41(d)(4)(F)](https://www.law.cornell.edu/uscode/text/26/41)
3. **Domestic costs from 2025 onward.** Deduct them in the year paid or incurred under §174A(a). The alternative is the §174A(c) election. It covers all domestic R&E for the year, is capitalized and amortized ratably over a period the taxpayer chooses of not less than 60 months, and starts in the month the taxpayer first realizes benefits. Make it by the return due date, including extensions, with a statement headed "FILED PURSUANT TO SECTION 6.02 OF REV. PROC. 2025-28" on the original return for the first year it applies. The statement gives the name, TIN, year, the declaration and the number of months chosen. Once made, it binds later years unless the IRS consents to a change, and it never reaches costs from earlier years. [§174A(c)](https://www.law.cornell.edu/uscode/text/26/174A); [Rev. Proc. 2025-28 §6](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)
4. **Foreign costs.** Capitalize them and amortize ratably over 15 years from the midpoint of the tax year paid or incurred. If the related property is disposed of, retired or abandoned after 12 May 2025, no deduction is allowed for the unrecovered amount and amortization simply continues. [§174(a), (d)](https://www.law.cornell.edu/uscode/text/26/174); [Rev. Proc. 2025-28 §2.03](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)
5. **Old 2022-2024 domestic balances.** For the first taxable year beginning after 31 December 2024 only, the taxpayer may elect to deduct the whole remaining unamortized amount in that year, or ratably over two taxable years starting with that year. If no election is made, keep amortizing on the original TCJA schedule. See the transition section below. Foreign 2022-2024 pools stay on 15 years. [OBBBA §70302(f)(2), in the notes to §174A](https://www.law.cornell.edu/uscode/text/26/174A)
6. **Decide whether any research is qualified research for §41.** Apply the four-part test and the exclusions below to each business component separately.
7. **Measure QREs**: wages for qualified services, supplies, computer-use payments, and 65% of contract research. Compute the credit, usually by the alternative simplified credit (ASC).
8. **Apply §280C(c).** Either reduce the §174A deduction (or capitalized amount) by the full credit, or elect the reduced credit on Item A of Form 6765.
9. **Consider the §41(h) payroll election** if the business is a qualified small business with little income tax to absorb the credit.
10. **File.** Attach Form 6765 to the timely original return, with the method statements required by Rev. Proc. 2025-28. For a payroll election, file Form 8974 with the employment tax return from the first calendar quarter that begins after the income tax return is filed.

## Transition: 2022-2024 domestic balances and the small-business election

Under TCJA §174, domestic specified R&E paid or incurred in tax years beginning after 31 December 2021 and before 1 January 2025 was capitalized and amortized over 5 years (15 for foreign) from the midpoint of the year. [Rev. Proc. 2025-28 §2.02](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)

- **Recovery election, available to any taxpayer.** The remaining unamortized amount is measured on the first day of the first taxable year beginning after 31 December 2024. Deduct it in full in that year, or half in that year and half in the next. The change is automatic (designated change number 273), on a cut-off basis with no §481(a) adjustment. A statement in lieu of Form 3115 is allowed, and no duplicate copy is filed. A return filed on or before 15 September 2025 for that year is deemed to comply if it actually took the one-year or two-year recovery. [Rev. Proc. 2025-28 §7.02](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)
- **Small-business retroactive election: the window has closed.** An eligible taxpayer could apply §174A back to tax years beginning after 31 December 2021 by amended returns or AARs. It had to meet the §448(c) gross receipts test for its first taxable year beginning after 31 December 2024: average annual gross receipts of $25,000,000 or less, inflation-adjusted to $31,000,000 for a year beginning in 2025. Tax shelters were excluded. Those filings were due by 6 July 2026. For a 2022 year, the deadline was earlier if the §6511 refund period ended first. The same deadline applied to late §280C(c)(2) elections and revocations for those years. As of 25 September 2026, do not start a retroactive election. A client who believes one was filed, or who has a 2024 fiscal year whose original return was filed after 28 August 2025, needs specialist review. [Rev. Proc. 2025-28 §§3-5, §7.02(3)(c)](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)

## §41 qualified research: the four-part test and exclusions

Research is qualified research only if all four parts are met, applied separately to each business component, which is a product, process, computer software, technique, formula or invention held for sale, lease or license or used in the trade or business. [§41(d)](https://www.law.cornell.edu/uscode/text/26/41)

- **§174A test**: the costs are treated as domestic R&E under §174A.
- **Technological information**: the research seeks to discover information that is technological in nature.
- **Business component**: the information is intended to be useful in developing a new or improved business component.
- **Process of experimentation**: substantially all of the activities are elements of a process of experimentation for a new or improved function, performance, reliability or quality, and not style, taste, cosmetic or seasonal design. "Substantially all" means 80% or more of the research activities, measured on cost or another consistent reasonable basis, for each business component. [Treas. Reg. §1.41-4(a)(6)](https://www.law.cornell.edu/cfr/text/26/1.41-4)

Excluded, even if the four parts are met: research after commercial production begins; adapting a component to a particular customer's need; duplicating an existing component; efficiency surveys, management studies, market research, routine data collection and routine quality testing; most internal-use software; foreign research; social sciences, arts and humanities; and research funded by another person. [§41(d)(4)](https://www.law.cornell.edu/uscode/text/26/41)

- **Funded research.** If the performer keeps no substantial rights in the results, the research is treated as fully funded, and the performer has no QREs. If it keeps substantial rights, the research is still funded to the extent of payments it is entitled to for doing the research. Payments contingent on success are not funding. Time-and-materials billing alone does not make work unfunded. [Treas. Reg. §1.41-4A(d)](https://www.law.cornell.edu/cfr/text/26/1.41-4A)
- **Internal-use software** means software developed primarily for general and administrative functions. It qualifies only if it passes the high-threshold-of-innovation test: innovative, significant economic risk, and not commercially available. Software for sale or licence, or software that lets third parties interact with the taxpayer's system, is not internal-use. For remaining dual-function software, a safe harbor lets the taxpayer include 25% of its QREs, but only if third-party use is reasonably anticipated to be at least 10% of its use. [Treas. Reg. §1.41-4(c)(6)](https://www.law.cornell.edu/cfr/text/26/1.41-4); [Form 6765 instructions](https://www.irs.gov/instructions/i6765)

## QREs and the credit computation

| Item | Rule | Source |
|---|---|---|
| Wages | §3401(a) wages for engaging in, directly supervising or directly supporting qualified research. For a self-employed individual or owner-employee, wages include earned income under §401(c)(2) | [§41(b)(2)](https://www.law.cornell.edu/uscode/text/26/41) |
| Substantially-all wage rule | If at least 80% of an employee's wages are for qualified services, all of that employee's services count | [Treas. Reg. §1.41-2(d)(2)](https://www.law.cornell.edu/cfr/text/26/1.41-2) |
| Supplies | Tangible property other than land, land improvements and depreciable property | [§41(b)(2)(C)](https://www.law.cornell.edu/uscode/text/26/41) |
| Computer use | Amounts paid to another person for the right to use computers in qualified research, under regulations | [§41(b)(2)(A)(iii)](https://www.law.cornell.edu/uscode/text/26/41) |
| Contract research | 65% of amounts paid to a non-employee for qualified research; 75% for a qualified research consortium | [§41(b)(3)](https://www.law.cornell.edu/uscode/text/26/41) |
| Regular credit | 20% of QREs above a base amount; base is the fixed-base percentage times average gross receipts of the 4 prior years, and never less than 50% of current QREs | [§41(a), (c)](https://www.law.cornell.edu/uscode/text/26/41) |
| ASC | 14% of QREs above 50% of the average QREs of the 3 preceding years | [§41(c)(4)(A)](https://www.law.cornell.edu/uscode/text/26/41) |
| ASC, a prior year with no QREs | 6% of current-year QREs if any one of the 3 preceding years had no QREs | [§41(c)(4)(B)](https://www.law.cornell.edu/uscode/text/26/41) |

**ASC election.** Make it by completing Section B of Form 6765 on the timely original return, including extensions. An amended-return ASC election is allowed only if no research credit was claimed for that year on an original or amended return, and no extension of time is granted. The election continues for later years. A taxpayer is deemed to revoke it by completing the regular-credit section on a timely original return. [§41(c)(4)(C)](https://www.law.cornell.edu/uscode/text/26/41); [Treas. Reg. §1.41-9(b)](https://www.law.cornell.edu/cfr/text/26/1.41-9) (the regulation still cites the ASC as §41(c)(5), its former number)

## §280C(c): coordinating the credit with the deduction

- **Default, for tax years beginning after 2024.** The domestic R&E otherwise deducted or capitalized is reduced by the full §41(a) credit. List the reduced amounts and the lines in a statement. [§280C(c)(1)](https://www.law.cornell.edu/uscode/text/26/280C); [Form 6765 instructions, Item A](https://www.irs.gov/instructions/i6765)
- **Reduced-credit election.** Take the credit minus the credit times the maximum §11(b) corporate rate (21%), which is 79% of the credit, and make no reduction to R&E. [§280C(c)(2)](https://www.law.cornell.edu/uscode/text/26/280C); [§11(b)](https://www.law.cornell.edu/uscode/text/26/11)
- **How to elect.** Check "Yes" on Item A of Form 6765 on the original timely filed return, including extensions. It cannot be made or changed on an amended return, and it is irrevocable for that year. The only exception was the closed small-business window described above. A §41(h) payroll amount counts as research credit for this purpose. [Form 6765 instructions](https://www.irs.gov/instructions/i6765); [§41(h)(1)](https://www.law.cornell.edu/uscode/text/26/41)
- Compare both routes at the taxpayer's actual marginal rate before electing.

## §41(h) payroll-tax election for a qualified small business

| Condition | Rule | Source |
|---|---|---|
| Who qualifies | Gross receipts under §448(c)(3) of less than $5,000,000 for the year, and no gross receipts in any year before the 5-taxable-year period ending with that year. For an individual, count all trades or businesses. Tax-exempt organizations are excluded | [§41(h)(3)](https://www.law.cornell.edu/uscode/text/26/41) |
| Amount | The least of: the amount elected (at most $500,000 for tax years beginning after 2022), the year's credit, or, for a business other than a partnership or S corporation, the general business credit carryforward from that year | [§41(h)(2), (4)(B)](https://www.law.cornell.edu/uscode/text/26/41) |
| How many years | Not allowed if elections were already made for 5 or more preceding tax years | [§41(h)(4)(B)(ii)](https://www.law.cornell.edu/uscode/text/26/41) |
| When and how | Form 6765 Section D on or before the due date, including extensions, of the original return. Not on an amended return. Made at entity level for partnerships and S corporations. Revocable only with IRS consent | [IRS QSB payroll credit](https://www.irs.gov/businesses/small-businesses-self-employed/qualified-small-business-payroll-tax-credit-for-increasing-research-activities) |
| Using it | Starting with the first calendar quarter that begins after the income tax return is filed: first against the employer share of social security tax, up to $250,000 per quarter, then the employer share of Medicare tax, with any balance carried to the next quarter. Claim on Form 8974 attached to Form 941 (or 943/944) | [Form 8974 instructions](https://www.irs.gov/instructions/i8974) |

## Thresholds and figures with years

| Figure | Year | Source |
|---|---|---|
| Domestic R&E current deduction; §174A(c) election of not less than 60 months | Tax years beginning after 31 Dec 2024, including 2026 | [§174A](https://www.law.cornell.edu/uscode/text/26/174A) |
| Foreign R&E amortization, 15 years from mid-year | 2025 and 2026 | [§174](https://www.law.cornell.edu/uscode/text/26/174) |
| ASC 14%, or 6%; regular credit 20% | 2025 and 2026 | [§41](https://www.law.cornell.edu/uscode/text/26/41) |
| Reduced credit: rate 21%, so 79% of the credit | 2025 and 2026 | [§11(b)](https://www.law.cornell.edu/uscode/text/26/11); [Form 6765 instructions](https://www.irs.gov/instructions/i6765) |
| Payroll election up to $500,000; QSB receipts under $5,000,000 | Tax years beginning after 2022 | [§41(h)](https://www.law.cornell.edu/uscode/text/26/41) |
| Retroactive small-business test: $31,000,000 | Tested for the first year beginning in 2025 only | [Rev. Proc. 2025-28](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf) |
| Form 6765 Section G required unless an exception applies (group QREs of $1.5 million or less, average annual gross receipts for the prior three tax years of $50 million or less, and the credit is on an original return; or a QSB claiming the payroll credit) | Tax years beginning after 2025 | [Form 6765 instructions](https://www.irs.gov/instructions/i6765) |

## 2025 returns (filing on extension to 15 October 2026)

- Calendar-year 2025 is the first taxable year beginning after 31 December 2024. The 2025 return is where the one-year or two-year recovery of old balances is chosen, where the §174A(a) method is adopted or the §174A(c) election is made, and where any §280C(c)(2) and §41(h) elections go. Calendar-year C corporations and individuals on extension file by 15 October 2026. Calendar-year partnerships and S corporations were due by 15 September 2026. [Rev. Proc. 2025-28 §2.08](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)
- For a taxable year beginning in 2025, the change to the §174A(a) deduction method or to §174A(c) amortization is automatic (designated change number 273, cut-off basis). A method change to §174A(c) for that year counts as the §174A(c) election. [Rev. Proc. 2025-28 §6.03, §7.02](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)
- Section G of Form 6765 is optional for tax years beginning before 2026. [Form 6765 instructions](https://www.irs.gov/instructions/i6765)
- If the 2025 return was already filed without the recovery election or method statement, stop and refer. Whether a superseding return before the extended due date is still possible depends on the entity and dates.

## Boundary and exception table

| Situation | Treatment |
|---|---|
| Developer in the US working remotely for a foreign parent | Domestic, because the test is where the research is performed |
| US company pays a contractor researching abroad | Foreign R&E: 15-year amortization, and no QRE ([§41(d)(4)(F)](https://www.law.cornell.edu/uscode/text/26/41)) |
| Software development | Always R&E under §174A(d)(3) or §174(c)(3); QREs only if the four-part test is met and it is not excluded internal-use software |
| Fixed-fee client work where the client owns all results | Fully funded for the performer: no QREs ([Treas. Reg. §1.41-4A(d)(2)](https://www.law.cornell.edu/cfr/text/26/1.41-4A)) |
| One of the 3 prior years had zero QREs | ASC at 6% of current QREs |
| Gross receipts under $5,000,000 but first receipts more than 5 tax years ago | Not a QSB: no payroll election |
| QSB C corporation with enough income tax to use the credit | Payroll portion limited to the carryforward, so it may be nil |
| Foreign-research property abandoned after 12 May 2025 | No write-off; amortization continues |
| Old domestic pool, no recovery election made | Continue on the original TCJA schedule |

## Worked cases

**Case 1: ASC with and without the §280C election (tax year 2026).** A calendar-year C corporation has 2026 QREs of $1,000,000. QREs for 2023, 2024 and 2025 were $600,000, $700,000 and $800,000, so the average is $700,000. Half of that average is the base: $350,000. Excess QREs are $650,000. ASC: $650,000 × 14% = $91,000. With the reduced-credit election: $91,000 × 79% = $71,890, and no cut to the §174A deduction. Without it, the credit is $91,000, and the 2026 §174A deduction for domestic R&E is reduced by $91,000. [§41(c)(4)](https://www.law.cornell.edu/uscode/text/26/41); [§280C(c)](https://www.law.cornell.edu/uscode/text/26/280C)

**Case 2: a prior year with no QREs.** 2026 QREs are $400,000, and 2024 had no QREs. ASC: $400,000 × 6% = $24,000, before any §280C election. [§41(c)(4)(B)](https://www.law.cornell.edu/uscode/text/26/41)

**Case 3: foreign contractor.** In 2026 a calendar-year company pays $150,000 to a contractor doing its research abroad. The 2026 deduction is $150,000 ÷ 15 ÷ 2 = $5,000. After that it is $10,000 a year for 2027 through 2040, then $5,000 in 2041. None of it is a QRE. [§174(a)](https://www.law.cornell.edu/uscode/text/26/174)

**Case 4: old domestic balance.** On 1 January 2025 a calendar-year company has a remaining unamortized 2022-2024 domestic balance of $240,000. It elects two-year recovery on its 2025 return with the statement in lieu of Form 3115 (change number 273). Deduction: $240,000 ÷ 2 = $120,000 in 2025 and $120,000 in 2026. The one-year election would give $240,000 in 2025. [Rev. Proc. 2025-28 §7.02](https://www.irs.gov/pub/irs-drop/rp-25-28.pdf)

**Case 5: payroll election.** A C corporation first had gross receipts in 2023. Its 2026 gross receipts are $1,200,000, it has no income tax liability, and this is its first §41(h) election. It has the Case 1 credit of $71,890 after the reduced-credit election. It is a QSB, because receipts are under $5,000,000 and none arose before the 2022-2026 window. It may elect $71,890, the least of the amount elected, the credit and the carryforward. If the 2026 return is filed on 12 March 2027, the credit starts on the Form 941 for the quarter beginning 1 April 2027, with Form 8974 attached. [§41(h)](https://www.law.cornell.edu/uscode/text/26/41); [Form 8974 instructions](https://www.irs.gov/instructions/i8974)

**Case 6: sole proprietor.** A sole proprietor personally writes and tests new algorithms for a product they license to customers. Their earned income for those qualified services counts as wages for QREs. Their domestic R&E is deducted under §174A(a). [§41(b)(2)(D)(ii)](https://www.law.cornell.edu/uscode/text/26/41)

## When to refuse or refer

- Any attempt, after 6 July 2026, to make the small-business retroactive election or a late §280C(c)(2) election or revocation for 2022-2024.
- A 2025 return already filed without the needed Rev. Proc. 2025-28 statements, a short 2025 tax year, or a fiscal year that straddles 2024-2025.
- Correcting pre-2025 §174 treatment (designated change number 265), or foreign-research method changes (change number 274).
- Controlled groups, acquisitions or dispositions affecting the credit base, and regular-credit computations that need 1984-1988 data.
- Contract research where rights and payment terms are unclear, contingent-fee arrangements, and internal-use software claims that rely on the high-threshold test.
- Foreign-source allocation of R&E (§861), partnership special allocations, and state returns. Check each state's own conformity guidance for §174A before filing a state return.
- A third-party "credit study" that the preparer is asked to sign without independent review.

## Filing and payment steps with deadlines

1. **Credit**: Form 6765 with the timely original return (Form 1040, 1065, 1120-S or 1120). Partnerships and S corporations must file it to claim the credit. [Form 6765 instructions](https://www.irs.gov/instructions/i6765)
2. **Elections on that return, by its due date including extensions**: §174A(c) statement; recovery statement in lieu of Form 3115 (first post-2024 year); Item A §280C(c)(2); Section B for ASC; Section D for §41(h).
3. **Payroll credit**: Form 8974 with Form 941 for the first calendar quarter beginning after the income tax return is filed; carry unused amounts forward quarter by quarter. [Form 8974 instructions](https://www.irs.gov/instructions/i8974)
4. **Amended research-credit claims** (new or increased credit): identify all business components, all research activities for each, and the total qualified wage, supply and contract research expenses for the year. Form 6765 may be used. The IRS waived the names of individuals and the information sought for claims postmarked after 18 June 2024. The 45-day window to perfect a claim was last extended through 10 January 2026, so check the IRS page for its current status. [IRS research claim requirements](https://www.irs.gov/newsroom/irs-sets-forth-required-information-for-a-valid-research-credit-claim-for-refund)
5. **Penalties**: 20% of an underpayment attributable to negligence or a substantial understatement ([§6662](https://www.law.cornell.edu/uscode/text/26/6662)); 20% of an excessive refund claim unless due to reasonable cause ([§6676](https://www.law.cornell.edu/uscode/text/26/6676)).

## Completion checklist

- Tax year and transition year identified; fiscal-year and short-year issues flagged.
- Every R&E cost classified as domestic (§174A), foreign (§174) or an old 2022-2024 balance, with location evidence.
- §174A(c) election decided and, if made, the statement attached with the months chosen.
- Recovery election for old domestic balances decided and documented (one-year, two-year, or none).
- Four-part test documented per business component, with exclusions (funded, internal-use, foreign, after commercial production) considered.
- QREs reconcile to payroll, contractor (65%) and supply records; self-employed earned income included where qualified.
- ASC or regular credit chosen and consistent with prior-year elections.
- §280C(c) route compared, and Item A answered on the original return.
- §41(h): receipts test, five-year window, prior-election count and carryforward limit checked; Form 8974 quarter identified.
- Form 6765 Section G completed or an exception confirmed (required for tax years beginning after 2025).
- State conformity checked separately.

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## Today's figures and who stands behind this skill

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