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How to File Amended Tax returns for R&D Tax Credits

Taxpayers are allowed to file amended returns to reflect any changes or omissions from the original return if the amended return is filed within the three-year statute of limitations. Amended tax returns are an effective tool for capturing overlooked credits from prior years.

There are many reasons a company, or individual, may decide to file an amended tax return. Some of the most common reasons include correcting an error or omission to income, changing the amount of deductions, or claiming or correcting a credit. Companies first learning about the R&D tax credit often wonder if they can claim credits for previous tax years. The short answer is yes!

Generally, you must file an amended return within three years from the date you filed your original return. If you filed your original return prior to the due date, the tax return is considered filed on the due date. For example, if your due date is April 15th and you file prior to April 15th, your return is considered filed on April 15th for purposes of the statute of limitations. If you extend your return, the actual date you file is used for purposes of the statute of limitations. For example, if you extend the due date from April 15th to October 15th and file on July 21st, then July 21st is your filing date.

Companies filing amended returns to claim R&D tax credits should be aware of the requirements for a valid R&D tax credit claim. For a refund claim to be valid, the following information should be provided with the amended tax return.

Identify all the business components to which the R&D tax credit claim relates for that year.

For each business component:

  • Identify all research activities performed;
  • Identify all individuals who performed each research activity; and
  • Identify all the information each individual sought to discover.

Provide the total qualified employee wage expenses, total qualified supply expenses, and total qualified contract research expenses for the claim year.

In submitting an amended return claim for R&D tax credits, companies must identify the grounds and specific facts in support of the claim. The above information achieves this purpose.

Earnd can help you document your qualified research activities and expenses for you to file a valid claim for R&D tax credits on amended tax returns.