Alternative Simplified Credit Election OK on Amended Returns, IRS Says

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Feb. 26 — The IRS has issued final rules confirming that taxpayers may make an election on amended returns to use the alternative simplified credit method for calculating the credit for increasing research activities.

Taxpayers who didn't claim a credit on an original return can file an amended return for the previous three years claiming the research credit using the ASC method under tax code Section 41(c)(5), the Internal Revenue Service said in final rules (T.D. 9712, RIN 1545-BL78) released Feb. 26.

This is a taxpayer-favorable move, Nathan Buchalski, a tax solutions partner at Plante & Moran PLLC, told Bloomberg BNA Feb. 26. Previously, taxpayers were only able to amend returns using the general method, which can require financial information from decades prior.