IRS Expands Time Period to Claim R&D Tax Credits on Prior & Current Year Tax Returns

Written by Mitch Feldman. Updated Apr 17, 2020.


On April 9, 2020 the Treasury Department and the Internal Revenue Service announced another round of relief provisions in response to the COVID-19 pandemic. This new wave of relief measures is intended to provide further benefits to taxpayers in addition to the previous measures already implemented.

The IRS notice (Notice 2020-23) takes several steps to provide relief to taxpayers, primarily through the postponement of certain tax and filing deadlines. Notably this includes relief from the April 15th filing deadline for individuals, but also filings for partnerships, certain trusts, and more. This also means interest, penalties, or additional taxes for failure to file are waived for these listed specified forms.

R&D Tax Credits Can Upload Savings for Digital Therapeutics Research

However, a new provision added in the notice is relief for taxpayers with respect to specified time sensitive actions. This provision states that for certain time sensitive actions due to be performed on or after April 1, 2020 through July 15, 2020, that taxpayers will have until July 15, 2020 to perform those actions. These actions include filing petitions with the Tax Court, filing a claim for a credit or refund of any tax, and bringing a lawsuit upon a claim for credit or refund of any tax.

In practice, this provides major relief for taxpayers that would be facing a statute of limitations to file for a refund of any applicable tax credit, including the R&D tax credit. Typically, individual taxpayers have three years after the due date of the tax return, or three years after the date the tax return was actually filed, whichever is later, to amend a tax return to claim a tax credit. Thus, for many taxpayers, the 2016 tax year returns would be approaching the deadline to claim a tax credit on an amended return. This relief provides additional time before the statutory period closes to amended returns.

Individual taxpayers and certain corporations, both calendar year and fiscal year, now have an extended window to claim tax credits available to them. This includes impactful incentives such as the R&D tax credit, which can provide significant tax savings to qualifying companies. You should consult a tax specialist immediately to determine if this grace period provides you with a chance for additional tax benefits.


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Topics: R&D Tax Credit, Legal News

Mitch Feldman

Written by Mitch Feldman

As an experienced, licensed law practitioner, Mitch bolsters CTI’s efforts with his extensive focus on Research and Development (R&D) tax credits. An ambitious, patient, and provident approach has guided Mitch to successfully identify, substantiate, and defend many clients’ R&D credit claims. With a bachelor’s in government and business from the University of Texas, and a J.D. from the University of Houston Law Center, he remains at the forefront of current tax law regarding court decisions and U.S. Treasury regulations.