IRS Extends the Transition Deadline for R&D Tax Credit Claims

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Posted by Randy Eickhoff on Oct 12, 2022 9:16:20 AM

On Friday, September 30, 2022, the IRS posted a news release extending the deadline to provide feedback to taxpayers submitting amended tax returns for R&D tax credit claims to January 10, 2024. 

Research and Development Tax Credit: The Background Behind The Deadline Extension

On September 15, 2021, the IRS issued IR-2021-23. This document provided new rules for submitting claims for R&D tax credits on amended tax returns. For each amended tax return submitted, additional information on the qualifying activities of the tax entity was now required to be attached to the amended tax return. 

Specifically, the additional information to be provided when filing the refund claim includes the following: 

  • Identify all the business components to which the Section 41 research credit claim relates for that year.
  • For each business component, identify all research activities performed and name the individual who performed each research activity, as well as the information each individual sought to discover.
  • Provide the total qualified employee wage expenses, total qualified supply expenses, and total qualified contract research expenses for the claim year (typically provided on the Form 6765). 

Originally, the IRS noted that they would offer a transition period whereby they would provide feedback on the information submitted as taxpayers worked to provide the requested information in a format that would be acceptable to the IRS. This transition period was initially set to expire on January 10, 2023, and noted that the taxpayer would have 30 days to perfect the refund claim after receiving IRS comments. The updated legislation extends the initial 30 days to 45 days and extends the transition period to January 10, 2024. 

As noted in The Tax Advisor article dated 10/3/2022, this announcement and extension come less than one week after an AICPA Tax Executive Committee letter to the IRS with recommendations to ease the amount and type of information required. 

Connect With an Acena Research and Development Tax Professional Today

Have additional questions? Please contact Acena Consulting to connect with one of our R&D tax credit professionals today. 

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Randy Eickhoff

Randy Eickhoff

Acena Consulting Founder and Partner. Randy is a licensed CPA and has worked with over 200 companies on various tax credits and other government incentives including multinational technology firms as well as small privately held manufacturing, sports, and technology companies.