The 10-point
§174A eligibility checklist.

v0.1 · for tax years 2022–2024 · last updated 2026-05-01

The OBBBA One Big Beautiful Bill Act of 2025 created a one-time retroactive election: businesses with average gross receipts ≤ $31M over the last 3 years can amend 2022, 2023, and 2024 returns to deduct previously-amortized R&D costs immediately, and combine that with the §41 R&D credit. The election deadline is July 6, 2026.

This checklist is the screen we run before generating a workpaper. If you can tick all 10 boxes, you're a strong candidate. If you can tick 7+, talk to your CPA — there's almost certainly money on the table.

i.Entity & year basics

• US-incorporated entity.LLC, S-Corp, C-Corp, or partnership formed in any US state. Foreign-headquartered companies with a US subsidiary qualify only on the US sub's R&D spend.
• Filed 2022, 2023, and/or 2024 federal returns.You need a return on file to amend. If a year wasn't filed, that year is not in scope.
• Average gross receipts ≤ $31M over the trailing 3 tax years.This is the OBBBA threshold. If you crossed $31M in any of the last 3 years, you may still qualify under transition rules — flag it for review rather than assuming a no.

ii.R&D activity profile

• Software development is the primary R&D.Web/mobile apps, SaaS, infra, ML systems, internal-use software meeting §1.41-4(c)(6). Manufacturing-process R&D, biotech, and hardware require a different methodology — out of v1 scope.
• The work meets the §1.41-4 four-part test.(1) Technological in nature, (2) eliminates uncertainty, (3) follows a process of experimentation, (4) serves a permitted purpose (new/improved function, performance, reliability, or quality). Maintenance, customer support, and sales-engineering work do not qualify.
• You can describe your projects in plain English."We built X feature using Y stack to solve Z technical uncertainty" — that's the level of detail. Each project becomes a paragraph in the workpaper.

iii.Documentation you'll need

• Filed return PDFs for each amendment year.Form 1120 (C-Corp), 1065 (partnership), or 1120-S (S-Corp). The PDF your CPA filed — not the working draft.
• Payroll register CSVs for each amendment year.Any common payroll provider works (Gusto, Rippling, ADP, Paychex, QBO Payroll). We auto-detect column headers — name, role, wages by year. Hours are nice-to-have but not required.
• A list of R&D engineers and what they worked on.Names, role titles, % of time on R&D vs. non-R&D work. The classifier is conservative — when % isn't clear, it under-claims rather than over.

iv.Reviewer relationship

• You have (or can find) a CPA who'll file the amended return.This is the deal-breaker most founders miss. Section174.app produces the workpaper; a CPA must file Form 6765 + the amended return (1120-X / 1065-X / 1120-S amended). We ship a partner directory of small CPA firms who work with sub-$5M-ARR SaaS founders if you don't already have one.

v.What the workpaper actually contains

So you know what you're getting if you proceed. Each amendment year's workpaper PDF includes:

• Cover page — entity name, EIN, tax years covered, total recovery estimate.
• Executive summary — one paragraph + three bullets your CPA can lift directly.
• Methodology — which IRS regulations were applied (§1.41-4 four-part test, §174A election text, §41 base-amount or alternative-simplified-credit selection), classifier confidence range, conservative-posture statement.
• Per-year detail — gross receipts, prior-year amortized §174 expense being recovered, §41 credit calculation (regular vs. alternative simplified), refund estimate.
• Employee QRE matrix — every W-2 engineer × % time on R&D × wages × qualified portion.
• Project-by-project assessment — your project list, verbatim, with the classifier's QRE assessment per project, citing the specific §1.41-4 test prong.
• Form 6765 line-by-line schedule — what your CPA needs to fill in, with our suggested values.
• Disclaimers and citations — IRS-reg references for every line item, plus the standard "self-assessment artifact, not tax advice" language.

vi.Common edge cases — when to email us first

• Mixed-receipts holding company. The $31M threshold is at the consolidated-group level — but how you allocate matters. Worth a 5-minute conversation.
• Acquired or merged during 2022–2024. Predecessor R&D may or may not be in scope. Depends on the structure of the deal.
• State conformity matters. California and New Jersey have decoupled from federal §174 — your federal workpaper still works, but state-level analysis is separate. We disclose this in the workpaper for your CPA's reference.
• Already claimed §41 in original returns. Different math — you're amending for the §174A immediate-expensing portion, not double-claiming the credit. Our workpaper handles this correctly but flag it on intake.
• Foreign R&D spend. §174A is domestic-only; foreign R&D continues to amortize. We carve this out automatically if you flag it.

vii.Why this exists, briefly

Big-firm R&D-credit specialists (alliantgroup, KBKG, Strike Tax) charge 15–25% contingency fees — on a $200K refund that's $30,000–$50,000 plus a 3-month engagement. Their economics work for $5M+ refund cases. They do not work for the long tail of solo and 1–10-employee SaaS founders sitting on $80K–$300K of 2022–24 R&D credit nobody flagged.

The math has been doable in software for years. The OBBBA window made it urgent. Section174.app is a flat $499 per amendment year (or $1,500 for all three plus future ongoing studies) — the same workpaper a Big4 firm would produce, generated from the inputs you already have.

viii.Next step

If you scored 7+ on the checklist, the next step is the pre-order — we'll email you the moment intake opens (target: May 7, 2026), and the waitlist gets 20% off launch pricing.

Join the waitlist →    Have a question? →

© 2026 Section174.app · v0.1 · This is a self-assessment artifact, not tax advice. A licensed tax professional must review and file your amended return.