April 19, 2019

Software Final Regulations Passed for the R&D Tax Credit

On Oct. 4, 2016, the IRS published T.D. 9786, final regulations that improve opportunities for businesses that engage in internal use software development to claim the R&D Tax Credit. The final regulations provide guidance in defining qualified research activities related to internal use, non-internal use and dual-use software development. These final regulations are effective for tax years beginning on or after Oct. 4, 2016. For tax years ending on or after Jan. 20, 2015, and beginning before Oct. 4, 2016, the IRS will not challenge returns consistent with either the proposed or final regulations.