The Shop Floor Evidence Guide
What stands behind an R&D tax credit, and why your shop already has most of it.
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The number isn't the asset. The evidence is.
An R&D credit is only worth what you can show behind it. From tax year 2026 the IRS asks larger claimants to report the credit project by project on Form 6765, and it asks the same questions of anyone whose return is examined or who amends a prior year: what was the project, what was uncertain, what did you try, who worked on it, what did it cost. Smaller claims on an original return can skip that part of the form. They can't skip keeping records that support the credit. Records made while the work was happening carry far more weight than a story rebuilt a year later.
You already keep most of it
| What you already keep | What it shows |
|---|---|
| Drawings, RFQs and quote notes | What you set out to make and what looked hard |
| Job travelers, setup sheets, program and design revisions | What you tried, in order |
| Scrap tickets, rework records, photos of failed parts | What didn't work. Failures are strong evidence of real trial and error. |
| First-article, inspection and test reports | How you settled it, and when development ended |
| Emails about a difficult job | The open question, in your own words, with a date |
| Timecards and payroll | Who worked on it |
| Material and tooling invoices | What the trials consumed |
| Purchase orders and contract terms | Who carried the risk if it failed |
The three things most shops are missing
A dated note of the problem
Five lines when a hard job starts: what are we trying to make work, and what don't we know how to do yet. It shows the question existed before the answer.
Time by person by project
Wages are most of any credit. One line per person per week is enough, or a project code on the timecard.
Trial material kept apart from production material
Material scrapped in trials and first articles can count. Material for ordinary production runs can't. A project name on the invoice or the job settles it.
Three folders per project
1. Concept and design
Drawing, quote notes, the five-line problem note, the PO if a customer is paying.
2. Technical challenges
Setup and program revisions, fixture versions, scrap tickets, photos, the email saying why an approach was dropped.
3. Testing and validation
First-article and inspection reports, test data, customer approval.
Running an ERP? One R&D flag on the job number does the same thing.
About ten minutes a week
| When | What | Time |
|---|---|---|
| A hard job starts | Open the folder, write the five-line note | 10 min |
| Weekly | One line of time per person | 5 min |
| Monthly | Sweep loose photos, reports and invoices into the folders | 15 min |
| Quarterly | 30 minutes with us | 30 min |
How we use it
30-minute project walk-through
After you sign, half an hour with whoever knows your jobs best to shortlist the projects that were new or fought you.
Gather
You send what already exists for those projects. Nothing to write. Nothing to tidy.
Scan and specialist review
We read and index every file, tie each document to a project, and list what the records don't answer. An R&D tax specialist reviews that map before anyone is interviewed.
Short interviews
We talk to the people who did the work, and only about the gaps.
Already have a study? Seven checks
- Are the projects named one by one?
- How were the wage percentages set?
- Outside vendors: where was the work done and who owns the result?
- Were customer-paid jobs reviewed against contract terms?
- Were production costs kept out?
- Is owner time backed by specifics?
- Is there a support file behind the form?
Two or more 'not sure' answers are worth a second look before your next filing. We review an existing study at no charge.
Rules referenced: IRS Instructions for Form 6765 (Rev. December 2025) and Treasury Regulations section 1.41-4(d).
Find out in 15 minutes whether it's worth doing
Bring a rough idea of headcount and what your team worked on. We'll tell you whether there's a credit worth claiming and what the study involves.