Some Research on Style, Design Can Use Tax Credit, IRS Says

A taxpayer may be able to claim the research credit under certain circumstances for expenses that relate to matters such as the style or design of a product, so long as the research was intended for substantive matters like improving the product’s performance, the IRS says.

To qualify for the Section 41 credit, a taxpayer must show that substantially all activities were “elements of a process of experimentation for a qualified purpose,” such as a new or improved function of a product, or its performance, reliability or quality, the IRS said in a technical advice memorandum from its national office ...