To qualify, activities must:
Qualified Research Expenses (QREs)
The IRS allows several categories of Qualified Research Expenses (QREs):
Expense Type
Examples in Row Crops
Eligibility Notes
Wages
Agronomists, farm managers, trial coordinators
Direct, supervisory, and support roles qualify
Supplies
Seed, fertilizer, prototypes, field sensors
Must be consumed in the research process
Software / Cloud
Data analysis tools, yield mapping platforms
Eligible if used for qualified research
Contract Research
University or lab field trials
65% of eligible costs may be claimed
Compliance and Documentation
§174 Update
Following the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, §174 now allows immediate expensing of domestic research expenses for tax years beginning on or after January 1, 2025. Taxpayers may also elect optional amortization under new §174A. Foreign research expenses must still be amortized over 15 years. This is separate from the §41 credit but impacts overall tax planning.
Documentation requirements remain unchanged. Maintain clear records of:
Frequently Asked Questions
Do farmers qualify for the R&D Tax Credit?
Yes. Farmers and agribusinesses can qualify if they engage in systematic testing or trials that resolve technical uncertainty, not routine operations.
What expenses can be claimed?
Wages, supplies, cloud software, and a portion of contract research directly related to qualified R&D activities.
Which crops are eligible?
Common row crops such as corn, wheat, soybeans, and cotton can qualify when growers test new methods or technologies.
What activities do not qualify?
Routine farming, post‑discovery production, and non‑technical tasks such as sales or general management.
How much can row crop farmers typically save?
Savings vary by farm size and scope of activities. Industry reports suggest many row crop operations see $50,000 to $200,000 in annual credits when research activities are properly documented.
How should farmers document research?
Maintain side‑by‑side trial data, soil and yield records, equipment logs, and employee time allocations to support claims under IRS audit guidelines.
Next Steps
Estimate Credits
Use our calculator to estimate your potential federal and state benefits
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Related Sub-Industries
Does your state qualify for the State R&D Tax Credit?
Benefits for the R&D Tax Credit vary from state to state. Get an accurate estimate of your potential state tax credit!
How much could I get back for
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Great question! Try out our R&D Tax Credit Calculator to see the value of your R&D tax credit reward.
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