Who the credit fits
How the Section 41 R&D credit applies to specific kinds of companies, with the qualifying work spelled out for each.
- Software companies - Feature development, new architectures, and performance work under technical uncertainty - the core qualifying profile.
- Startups - Pre-revenue and early-stage companies can take the credit against payroll tax, not just income tax.
- AI companies - Model architecture, training pipelines, and novel ML approaches are experimentation by nature.
- Fintech - Risk engines, fraud detection, and payments systems - algorithmic work, with an internal-use-software wrinkle to watch.
- Agencies and dev shops - Client work is often funded research that does not qualify - but agency-owned IP and at-risk work can. The funded-research test decides it.
- Healthtech - Clinical software, telehealth, and patient-data systems qualify on the engineering side, documented from commit metadata with no PHI involved.
- Devtools and infrastructure - Databases, observability, CI/CD, and cloud infrastructure are among the most experimental software there is - a strong qualifying profile.
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Not sure your work qualifies? The four-part test is the threshold every claim clears, whatever your industry.