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Customer-driven research is not automatically excluded from the R&D tax credit. Explore the contract terms, economic risk, and research rights CPAs should evaluate.

The R&D Tax Credit has long been one of the most powerful innovation-driven incentives in the tax code. While the core eligibility rules and definitions of qualified research expenses (QREs) have not changed, the reporting landscape has shifted, particularly with the introduction of a detailed Section G on the redesigned Form 6765.

A look at new IRS guidance on the Section 174 method change process, covering how taxpayers must coordinate 481(a) adjustments with OBBBA catch-up deductions and key Form 3115 transition relief deadlines.

This government contractor R&D tax credit guide breaks down how CPAs can identify qualifying projects under Section 41 — covering the financial risk and research rights tests, common qualifying activities, and how to spot wages, supplies, and contract research expenses across federal and SBIR/STTR work.

As businesses invest in artificial intelligence, new questions are emerging about workforce training, data security, and which AI-related activities may qualify for the R&D tax credit.

Explore how federal manufacturing tax incentives and varying state tax treatments could shape expansion, investment, and site selection decisions.

Join us for six technical webinars designed to help CPA firms navigate evolving compliance requirements, uncover overlooked planning opportunities, and strengthen advisory conversations heading into the second half of 2026.

Construction companies may be overlooking valuable R&D tax credits. Learn how qualifying design-build projects and activities can meet the requirements for the R&D tax credit.

Learn how CPA firms can identify manufacturing clients that qualify for the federal and state R&D tax credits, including qualifying activities, expenses, and common misconceptions.

Iowa R&D Tax Credit rules have changed. Businesses must obtain IEDA certification before claiming the credit, with applications due by September 30, 2026. Learn who qualifies and how to prepare.

The Challenges of Funded Research in R&D Tax Credits

Does customer-funded work qualify for the R&D tax credit? Passing the four-part test is only the beginning. For businesses performing research for customers, contract terms can determine whether otherwise qualified activities are excluded under the funded research rules.

In this episode of Let’s Talk Tax, host Dave McGuire joins David Seibel, EA, and Tanner Niehaus, CPA, to explore two key considerations: whether the taxpayer bears economic risk and retains substantial rights to the research. They explain why customer-driven work is not automatically disqualified and discuss how payment terms, warranty provisions, and intellectual property rights can affect the analysis.

Through examples involving software development, manufacturing, contract manufacturing, and design-build projects, the conversation highlights both overlooked opportunities and common eligibility mistakes. The team also compares the research contract standards under Section 41 and Section 174, discusses outsourced foreign research, and considers the business tradeoffs of changing contract terms.

Listen to learn what CPAs and business owners should look for when evaluating R&D tax credit eligibility beyond the four-part test.

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