You Shipped a New Feature. Does That Make It R&D?

By US Biz Toolkit · October 8, 2026

Quick answer: A release announcement is not a research-credit conclusion. The underlying work needs its own explanation.

Your roadmap says “new feature.” Your sales team says “innovation.” A tax reviewer needs a different description: what the team could not resolve at the outset and what it did to investigate. Start there before assigning all development spending to a credit estimate.

Compare two hypothetical projects

One team adds a standard report using an existing library and a documented implementation pattern. Another investigates a performance problem, compares alternative architectures and measures their behaviour under demanding conditions. These examples are discussion prompts, not eligibility rulings. Ask a professional what additional facts would matter in each case, including the actual use of the software.

Make a project record useful to someone outside the team

Choose a project and explain the requirement, unresolved technical issue and alternatives evaluated. Link to dated design notes and test results. Translate shorthand that would be obvious only to a developer. A reviewer cannot evaluate a ticket called “fix backend” without understanding the work behind it.

Separate mixed work

A release can contain experimental work, routine implementation, user-interface changes and support tasks. In your preparation notes, identify who did each part and when. Ask how the reviewer will distinguish activities and connect them to costs. Do not substitute a universal percentage for an explanation of your team’s actual work.

Ask about software-specific rules

The IRS instructions distinguish internal-use software and describe additional requirements in that context. Ask whether your software is sold to customers, used internally or serves both purposes, and let the reviewer explain the consequence. A software label alone is too broad to answer that question.

Keep the business conversation grounded

If a provider presents a large estimated benefit before reviewing any technical facts, ask what assumptions generated it. Request a list of exclusions and unresolved questions. A useful initial assessment can identify gaps; it does not need to announce a final claim. Your existing return preparer should understand the eventual position and supporting materials.

Your next step

Write a plain-language project summary and collect the underlying test records. Use the software guide before requesting a specialist assessment.

Read the related guide · Use the business tax finder

Sources and editorial notes

IRS primary-source reference. Sources checked October 8, 2026. Examples are hypothetical; people shown are AI-generated illustrations, not clients or endorsers. This article provides general education and has not been represented as reviewed by a tax professional. Eligibility and outcomes depend on your facts and current rules.