FOUR-PART TEST

The Four-Part test are the rules set forth by congress to help companies to determine if their activities qualify. The new rules generally allow for many more companies to meet these tests.  During the R&D study BTI helps interpret these for your business to determine what meets these tests.

 

The activity is intended to develop or improve a business component’s:

  • Functionality; or

  • Performance; or

  • Quality; or

  • Reliability

 

The activity must fundamentally rely on the principles of science such as:

  • Physical sciences

  • Biological sciences

  • Computer sciences

  • Engineering

 

Substantially all of the activities must be elements of a process of experimentation involving:

  • Evaluating alternative designs

  • Testing hypotheses

  • Trial and error testing/Modeling

  • Conducting experiments

The activity is intended to discover information to eliminate technical uncertainty regarding: 

  • Capability; or

  • Methodology; or

  • Appropriateness of the business
    component design

 

QUALIFIED RESEARCH activites

Just some of the qualifying indicators include:

  • Developing or engineering a new or improved product, process, formula, or software

  • Developing engineering architecture

  • Developing experimental models or protypes

  • Testing an experimental product, process, formula, or software

  • Beta testing

  • Improving processes or the manufacturability of a product

  • Technical design reviews

  • Participating in technical meetings

  • Documenting the results of research

  • Maintaining research equipment

  • Compiling research data

  • Fabricating experimental models

  • Experimenting with new technologies

  • Creating more efficient and environmentally friendly designs

  • CAD or 3D Modeling

  • Supervising technical personnel engaged in R&DPatentable products or production methods

  • Has new/continuous improvements to products and/or processes

  • Operates in industry where prototyping is common

  • Is awarded government R&D projects, from program such as: SBIR, STTR

  • Engages in Continuous Quality Improvement efforts

  • Manufactures simple products in a highly automated system

  • Creates high warranty costs due to improper product/process design

  • Degreed engineers or scientists on staff

  • Operates in a manufacturing industry

  • Develops software using new algorithms, techniques or architectures