Permitted purpose
The work must aim at a new or improved business component: a product, process, technique, formula, invention, or software, improved in function, performance, reliability, or quality.
When a business resolves real technical uncertainty through systematic experimentation, including the redesign of production processes, workstations, and human-machine interfaces (work grounded in human factors engineering, the discipline sometimes called cognitive ergonomics), that work can qualify for the federal research credit. The claim is only as strong as its documentation. That is our specialty. We prepare the study and the Form 6765 package, working alongside your accountant, or with return preparation through our affiliated firm, A&B Tax Services, if you want it all under one roof.
Every qualifying activity must pass all four requirements of §41(d). We evaluate your project against each, in writing, before any claim is built.
The work must aim at a new or improved business component: a product, process, technique, formula, invention, or software, improved in function, performance, reliability, or quality.
The work must fundamentally rely on principles of engineering, physical or biological science, or computer science. Biomechanics and human factors engineering sit here; opinion and preference do not.
At the outset, the capability, method, or appropriate design must be genuinely unknown. If the answer was already on the shelf, there is no credit.
Substantially all the activity must be an evaluative process: alternatives identified, tested, measured, and refined. Our measurement loop is this test, operationalized.
Redesigning an assembly sequence, pick path, or fixture layout to cut operator error and cycle time, resolving genuine design uncertainty through prototyped alternatives and pilot-line testing with measured results.
Control panels, operator dashboards, or workflow software where design questions are resolved through systematic technical performance testing (task success, input error rate, latency), not consumer preference surveys.
Engineering new tools, fixtures, or workstation hardware, from load and materials analysis through functional prototyping and iterative test cycles.
Safety and quality protocols engineered into machinery, software, or physical systems (interlocks, guided workflows, poka-yoke fixtures), where the deliverable is an engineered system, not a training program.
Developing, training, or integrating models, digital twins, and custom automation into your process, qualifying where design questions are resolved through technical testing. Merely adopting an off-the-shelf AI tool is excluded adaptation.
Engineering computer-vision inspection, sensor networks, and data-capture systems to instrument a process, where accuracy, placement, and calibration uncertainty is resolved through iterative testing.
Most firms selling R&D studies won't publish this list. We think it's the most important section on this page, because a credit worth claiming is one that survives examination.
Efficiency surveys and assessments alone. An evaluation that ends in recommendations, without development and experimentation, is an excluded efficiency survey.
Management techniques, coaching, and training. Habit programs, accountability systems, and workshops are excluded management functions.
Wellness programs and behavioral-science research. Research in the social and behavioral sciences is excluded by statute. Buying ergonomic equipment is not research.
Market research and preference testing. Finding out what users like is excluded; measuring what performs is not. The line matters and we hold it.
Adaptation and duplication. Installing a known solution, or copying an existing design, involves no uncertainty to resolve.
Funded research. Work paid for and controlled by another party generally belongs to that party's facts, not yours.
Under the 2025 tax act, domestic research costs are once again fully deductible in the year incurred (new §174A), ending the 2022 to 2024 amortization regime, and the §41 credit remains available on top of it. Timing, elections, and transition rules depend on your facts and filing history; we confirm current guidance as part of every engagement.
Bring us the project. We'll run the four-part test against your facts and give you a written answer, either way.
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