IRS Proposal Clarifies Use of R&D Credit for Software

By SEMA Washington, D.C., Staff

The Internal Revenue Service (IRS) has issued a proposed rule that would allow companies to claim the research and development (R&D) tax credit for the cost of computer software that is developed primarily for a company’s internal use. The proposal would not apply to software used for administrative functions. It would apply to software that is developed for use in a production process in support of a new product or manufacturing process. 

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