Reduced credit election
In accounting, reduced credit election means an election on the original timely filed return to take the research credit reduced by the 21% corporate rate (79% of it) instead of cutting the §174A research deduction by the full credit; irrevocable for the year.
Also called Section 280C election.
Authority: IRC §280C(c) (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 creditForm 6765, section by sectionForm 6765 section by section, the order to fill it in, and the hypothetical year's entries line by line.8 min
- R&D creditSection 174A and foreign research › §280C: the reduced credit electionThe credit and the §174A deduction share the same dollars: cut the deduction by the credit, or take 79% of the credit.5 min
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- reduced payroll credit
Components that render the terms it depends on
No component names this concept outright, but it's built from terms that components do name. These render credit.
Also in Research credit
Defined in Lexicon. This page is generated from that document, so the two can't disagree.