Updated IRS Guidance for Credit for Increasing Research Activities

On September 10, 2020, the IRS issued an updated Directive providing guidance on the examination process for eligible Large Business and International (LB&I) taxpayers who claim the federal Credit for Increasing Research Activities.

The Directive revises and clarifies the Directive issued in 2017. View the 2020 Directive

The Minnesota Department of Revenue will follow most of the 2020 Directive and allow the use of generally accepted accounting principles (U.S. GAAP) expenditures for calculating the Minnesota R&D Credit.

However, we will not follow the updated Part II C, which requires federal auditors to receive approval before requesting additional information not listed in Part V. Minnesota auditors do not need to receive approval before requesting other relevant documentation during an audit.

For more information, visit R&D Credit Documentation on our website.