R&D Tax Credit Documentation for Software Teams

A repository can contain many kinds of work. For an R&D credit review, the useful starting point is the business component: the product, process, computer software, technique, formula, or invention the company was trying to develop or improve.

For each component, write down the intended improvement, the uncertainty at the start, the alternatives considered, and the work used to evaluate those alternatives. The four-part test is applied separately to each business component, so a single company-wide engineering description is rarely enough.

Git history can help establish when work happened and who contributed. It is stronger when paired with the records that explain the technical context: design notes, issue tickets, experiment results, benchmarks, pull-request descriptions, and decisions about approaches that did not work.

QuarryFi is designed to organize activity metadata and review context without collecting source code. The final support file should still let the taxpayer and tax professional connect each claimed expense to a specific business component and qualified activity.

The credit calculation uses qualified research expenses, which can include qualifying wages, supplies, and eligible contract research. The category alone is not enough: the underlying work and allocation need support. Keep payroll, contractor, and project records alongside the evidence trail.

For tax years beginning after 2025, Form 6765 Section G is generally required unless a stated exception applies. When it is required, the form asks filers to report business-component information for at least 80% of total QREs, up to 50 components. Your CPA should determine whether an exception applies and what belongs on the filed return.

A timestamp, a commit message, or an AI-generated summary does not by itself establish eligibility. The facts and circumstances still matter, including the process of experimentation and statutory exclusions such as research after commercial production, certain internal-use software, funded research, and research outside the United States.

Use a review queue for uncertain work. That is more useful than treating every engineering task as qualifying, and it gives a tax professional a clear place to apply judgment before filing.

Before handing a support packet to a CPA or tax attorney, confirm that you have:

• A named business component and the intended improvement for each significant project
• A plain-language description of the uncertainty and alternatives evaluated
• Links or references to contemporaneous activity, design, test, and decision records
• Wages, contract, and other expense records tied to reviewed allocations
• A list of excluded, ambiguous, or manually adjusted items with a reason
• A current Form 6765 and Section G review for the tax year being filed

QuarryFi prepares organized support materials and estimates. It does not determine the taxpayer's final filing position, sign a return, or replace professional advice.