In his article “New Research Credit Regulations: Good News for Software” appearing in the March 9th edition of Tax Notes, Dean Zerbe, former Senior Counsel to the U.S. Senate Finance Committee and alliantgroup National Managing Director, discusses the U.S. Department of Treasury’s new regulations regarding the development of software and its eligibility for the Research and Development (R&D) tax credit. According to Zerbe, the new regulations are not only a boon for those engaged in software development, but they will also have broad benefits for other industries seeking to qualify for the research credit.
“Manufacturers, sellers on the web (both retail and business-to-business), banks, and financial institutions are all potential beneficiaries,” said Zerbe.
In the article, Zerbe notes that the new regulations are good news for U.S. businesses as they both clarify and narrow the definition of “Internal Use Software” (IUS), or software that is not sold, leased or licensed to a third party. As IUS must meet a higher standard to qualify for the R&D tax credit than traditional software development, the narrowing of software defined as IUS effectively broadens the application of the credit, allowing for more businesses from a variety of industries to claim the incentive.
Contact us today to learn how your business or your clients could benefit from the new IUS regulations and alliantgroup’s tax consulting services.