Leveraging Section 174? Unlock Savings with Section 41 R&D Credit

Can I Claim Section 41 R&D Credit if I account for R&D Under 174?

Section 174 covers a wide range of R&D expenses, but not all of these qualify for the valuable Section 41 R&D tax credit. The good news? Many eligible expenses overlap, and with the right approach, you can unlock significant cash savings for your business. 

Here’s what you gain by claiming Section 41: 

• Up to 14% back on qualified research expenses (QREs) 

• Leverage existing documentation with no duplicate effort 

• Reduce audit risk with expert-prepared claims 

• Full-service support from Ayming, global R&D tax specialists 

Book your complimentary Section 41 credit assessment with Ayming today. 

In-Depth Analysis: What is Section 41 R&D Tax Credit?

Section 41 Research & Development (R&D) Tax Credit is a federal incentive designed to reward businesses that invest in innovation. 

With recent changes to Section 174, businesses are no longer required to capitalize domestic R&D expenses. However, if you are utilizing foreign R&D resources, capitalization is still required.  

Despite these changes, Section 41 remains a valuable opportunity to recoup qualifying R&D costs through a direct tax credit.  

Key Elements of Section 41

Qualified Research Expenses (QREs) generally include: 

• Wages paid to employees performing or supervising R&D 

• Supplies or material costs used in R&D activities (not capital assets) 

• Payments to third parties for contract research (up to 65%) 

• Software development and cloud computing costs in some cases 

Calculation Methods:

• Regular Credit (RC): Up to 10% derived from base spending vs. historical benchmark 

• Alternative Simplified Credit (ASC): ~14% based on an increase over a three-year rolling average 

Most companies utilize the ASC method due to simpler computation and lower documentation requirements 

Why Choose Ayming for Your Section 41 Credit?

Ayming USA’s premium multidisciplinary team of consultants, scientists, engineers, tax attorneys, and technical writers have decades of global experience. We help you: 

• Identify overlooked R&D and R&E activities most firms miss 

• Craft audit-defensible, technical-first narratives 

• Increase accuracy claims compared to in-house or generic firms 

When you work with Ayming, you’re not just outsourcing paperwork, you’re partnering with a trusted authority focused on maximizing your savings. 

How Ayming’s Section 41 Credit Process Works

1. Complimentary Eligibility Review — Assess R&D portfolio and estimate credit potential. 
2. Activity Mapping & Interviews — Collaborate with your teams to identify qualifying research. 
3. Credit Calculation & Documentation — Prepare audit-ready claim packages. 
4. Filing Support & Audit Defense — Assist your tax team to prepare the documentation needed to file a claim, defending claims if audited. 

Who Qualifies for Section 41 Credit?

Your business potentially qualifies if you: 

• Employ engineers, designers, scientists, or technical staff 

• Develop new products, software, prototypes, or improve processes 

• Conduct experiments or feasibility testing 

• Solve technical uncertainties through R&D iterations, modeling, or experimentation. 

If these costs are capitalized under Section 174, your chances of qualifying are high. 

Maximize Your Savings. Minimize Your Risk.

Many companies see Section 174 as a compliance burden, but with Ayming’s expertise, you can turn those costs into valuable tax credits. Our clients benefit from: 

• Up to 14% cash-equivalent returns on eligible R&D expenses 

• Robust documentation that withstands IRS scrutiny 

• Seamless integration between Section 174 compliance and Section 41 claims 

• Industry expertise across software, agriculture, manufacturing, biotech, and more 

Don’t leave your R&D tax credits on the table. Partner with Ayming to unlock the maximum savings your innovation deserves. 

Don’t Miss Out — Claim Your Section 41 Credit Now! 

Contact Ayming today and start maximizing your R&D savings! 

FAQs — Deepening Understanding

Can I claim Section 41 if I already follow 174?
Yes, Section 174 records often form the backbone of your Section 41 claim. 

Which method should I use — RC or ASC?
We evaluate both the Regular Credit (RC) and Alternative Simplified Credit (ASC) methodologies based on your historical R&D spend. Whenever possible, we build both calculations and select the method that yields the greatest benefit for your business. 

How much time is needed?
With cooperation from your teams, most studies and documentation can be ready within two to three months. 

Do you work with my tax advisors?
Yes, we seamlessly integrate with internal or external tax teams and your CPA.