R&D is not new to U.S. tax law. In fact, R&D has been available to taxpayers since the early 1980s and promoted heavily, as this tax credit has proven to translate into job growth. However, the types of activities that qualify have not been communicated consistently, creating confusion and skepticism among the taxpayer community. Finally, in 2001 and 2004, the Treasury Department provided much-needed guidance by issuing regulatory revisions and clarifications to the tax law. Not only did this guidance serve to enhance the understanding of qualifying activities, but it also broadened the definitions of what qualifies for R&D treatment.
The following activities are indicative that the qualification requirements of R&D have been met: