Are expenses other than wages, supplies, and contract research eligible for the R&D credit?

Generally, no.  These three classes of expenses form the basis for the credit in the majority of cases.  In certain cases, cloud computing expenses for software development may also qualify.

Note that there are several additional types of expenses that are eligible for the credit, but they are not common. The additional types of expenses are:

  • Certain amounts paid or incurred to energy consortia
  • Basic research payments to qualified organizations
  • Rental or lease costs of computers (can potentially include cloud computing expenses) 

Each expense category has special rules, outlined in the Form 6765 instructions as well as the underlying tax code and regulations.