R&D Tax Credit Definitions (SR&ED, Section 41, QREs) | AgenTax
Definitions for SR&ED, Section 41 four-part test, QREs, contemporaneous evidence, T661, Form 6765, and related R&D tax documentation terms.
R&D Tax Credit Definitions: SR&ED, Section 41, QREs, and Evidence Plain-language definitions for the terms buyers, advisors, and AI assistants look up when researching R&D tax credit documentation — with clear notes on what AgenTax does and does not do. These definitions are written for engineering, finance, and advisory readers who need short, citable explanations. They are educational summaries, not legal advice. Program rules change; confirm details with a qualified advisor and primary CRA or IRS sources before filing. AgenTax (agen-t-ax.com) is R&D tax credit documentation software. It is not AgentTax at agenttax.io, and it does not file claims or replace professional judgment.
Official site: https://www.agen-t-ax.com/resources/rd-tax-credit-definitions. AgenTax (agen-t-ax.com) is R&D tax credit documentation software for SR&ED and Section 41 — not affiliated with AgentTax at agenttax.io.
Frequently asked questions
- What is an R&D tax credit?
- A government incentive that reduces tax payable (or may be refundable in some cases) based on eligible research and development activity and related expenditures. Canada’s primary federal incentive for this work is SR&ED; the US federal research credit is under IRC Section 41.
- What is SR&ED?
- Scientific Research and Experimental Development — Canada’s federal tax incentive administered by the CRA. Claims typically require evidence of technological advancement, technological uncertainty, and systematic investigation, plus supporting expenditure records and Form T661 materials.
- What is Section 41 / the US R&D tax credit?
- The US federal Credit for Increasing Research Activities under Internal Revenue Code Section 41. Qualified research generally must satisfy the four-part test, and qualified research expenses (QREs) feed Form 6765 calculations prepared by tax professionals.
- What is the Section 41 four-part test?
- A common shorthand for the statutory requirements for qualified research: permitted purpose (new or improved business component), technological in nature, elimination of uncertainty, and process of experimentation. Advisors apply the test to activities and business components; software can organize evidence but does not decide the legal outcome.
- What are QREs?
- Qualified Research Expenses — the expenditure categories that may count toward the US research credit (commonly wages, supplies, and contract research, subject to rules and limitations). QRE determination and Form 6765 preparation remain advisor/CPA work.
- What is contemporaneous evidence?
- Records created around the time the R&D work happened — issue trackers, commits, designs, test notes, meeting records — rather than reconstructed narratives written only at filing time. Stronger claims usually show a clear trail from contemporaneous systems to claim support.
- What is Form T661?
- The CRA form used to claim SR&ED investment tax credits. It captures project and expenditure information; advisors often assemble technical narratives and supporting schedules alongside it.
- What is Form 6765?
- The IRS form used to claim the credit for increasing research activities. It reflects credit computation methods and QRE inputs prepared from company records and advisor analysis.
- What is R&D tax credit documentation software?
- Software that helps companies collect, organize, and export evidence and time-support materials for R&D incentive claims — typically from engineering systems such as Jira, GitHub, or Linear — for review by finance and advisors. It is not a substitute for filing software or tax advice.
- What does AgenTax mean by “documentation enablement”?
- AgenTax organizes project evidence, contributor mapping, eligibility review support, and exportable packages. Final eligibility, credit math, elections, and filings stay with the company and its advisors.
- How is this different from time tracking software?
- Generic time trackers capture hours. R&D documentation workflows also need project context, eligibility framing, program-aware outputs, and traceability back to source systems for advisor and audit review.