Contact UsCan taxpayers go back and file Research Tax Credits on their Federal tax return for previous years or are they just available on timely filed tax returns?
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Tax Professional Answers
Peter Scalise, SAX LLP
Yes, taxpayers may generally go back and file research tax credit claims for the prior three open statutory years.
However, as a caveat, the Alternative Simplified Credit ("ASC") methodology and the I.R.C. § 280C election can only be claimed on timely filed tax returns. To that end, when going back and filing research tax credit claims for previously filed tax returns for prior open statute years only the Regular methodology can be utilized requiring the substantiation of the taxpayer’s fixed base percentage which often times is impracticable.
From a tax compliance perspective, if a taxpayer is in a Net Operating Loss (“NOL”) position, then the taxpayer will not need to go back and amend tax returns but rather adjust their NOL carryforward schedule. In contrast, if the taxpayer is in a taxable position then amended tax returns will be required to capture these look-back research tax credit claims.
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562 weeks ago
However, as a caveat, the Alternative Simplified Credit ("ASC") methodology and the I.R.C. § 280C election can only be claimed on timely filed tax returns. To that end, when going back and filing research tax credit claims for previously filed tax returns for prior open statute years only the Regular methodology can be utilized requiring the substantiation of the taxpayer’s fixed base percentage which often times is impracticable.
From a tax compliance perspective, if a taxpayer is in a Net Operating Loss (“NOL”) position, then the taxpayer will not need to go back and amend tax returns but rather adjust their NOL carryforward schedule. In contrast, if the taxpayer is in a taxable position then amended tax returns will be required to capture these look-back research tax credit claims.