What is a Multi-Year Lookback R&D Credit?

In 2011, “the largest 0.13 percent of all firms in the US claimed 14 percent of the credits,” according to research by the Mercatus Center at George Mason University. The fact is: most companies still don't claim the R&D credits they're owed.

Because many companies were wary of the stipulation under the Tax Cuts and Jobs Act (TCJA) that forced companies to amortize or capitalize their R&D deductions, many didn't claim R&D credits over these last few years. But because tax filings are amendable for three tax years (and in some cases, even more years), companies can perform look-back studies in order to file for R&D credits for those previous years.

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What is a Multi-Year Lookback?

Many people don’t know this, but you can claim the R&D tax credit for the current tax year plus amend returns for the previous three tax years. For example, in 2025, you could claim credits for 2025, 2024, 2023, and 2022. That retroactive tax filing could be worth hundreds of thousands of dollars (or more) for your company. Neo.Tax doesn’t just stop at your prior three years, though. Due to the mechanics of the credit calculation, it may be beneficial to go back even further to substantiate qualified research activities to maximize the credit in your amended tax years.