Business component
In accounting, business component means the unit qualified research is tested and reported in: a product, process, computer software, technique, formula or invention held for sale, lease or license or used in the taxpayer's own business — listed one by one in Form 6765, Section G.
Authority: IRC §41(d)(2)(B) (opens in a new tab). Sources
The lessons that teach this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
- R&D creditWhat the R&D tax credit is, and who can use itA federal credit for qualified research, usually wages: what it is, the three places it can go, and why a tool reseller doesn't get one.8 min
- R&D creditThe four-part test: what counts as qualified researchFour tests, applied to each business component separately, worked on one hypothetical piece of software.10 min
- R&D creditForm 6765, section by section › Section G: business component detailBusiness component detail: optional before 2026, required after unless one of two exceptions applies, and the 80%/top 50 rule.5 min
- R&D creditRecords, amended claims and state creditsThe records a credit stands on, what an amended-return claim must contain, which elections it can't make, and where state credits come in.9 min
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- project (a business component can span several)
Also in Research credit
Defined in Lexicon. This page is generated from that document, so the two can't disagree.