Salary & Wages

• There are generally three categories of employees performing research:
• Employees that perform Direct research. This includes people specifically performing the activities, (researchers, engineers, CAD associates, project managers, etc.) and is the core of the credit.
• Employees that Directly Supervise research. This includes anyone who is directly supervising the employees doing the direct research.
• Employees that Directly Support research. This includes anyone who is directly supporting research efforts. For example, let’s say a researcher has a direct assistant who is strictly taking notes and accumulating data. Their time assisting the direct researcher is also included.  Similarly, a person testing prototypes and first articles would also be considered direct support. 

Supply Costs

• If you are prototyping and testing materials, the cost of those materials can be included. For example, the materials associated with prototype builds are research costs as are the costs of materials used in the evaluation of new formulations of beauty products can be included as supply costs.

Computer Rental or Lease

• Claiming expenditures for computer rentals or lease costs are becoming more prevalent with software development companies needing to run complicated research algorithms and testing techniques. These expenditures are often in the form of the costs associated with cloud storage that’s specifically dedicated to research activities. 

Contractors

• When non-employees perform research, often those are qualified contractor costs.  You can include contractors/outside resources that you hire as long as those resources are directly associated with your research activities. For instance, if you need to hire a specialist with electrical engineering expertise, you can include 65% of those expenditures for research activities for outside researchers.