Can a research-credit provider count my entire owner salary because I supervise product development?
An owner's salary is not wholly qualified simply because the owner oversees product development.
By AE Tax Advisors Team · Updated October 28, 2026
An owner's salary is not wholly qualified simply because the owner oversees product development. Qualified services and their time allocation must be established. Section 41's substantially-all rule can affect wage inclusion when its requirements are actually met, but a title or unsupported percentage is not enough.
A specific business-owner situation
A founder handles sales, fundraising and technical supervision. A study includes the full salary without distinguishing technical research supervision from general executive work.
Illustrative example, not a client result.
What to establish before filing
- Map duties to qualifying research services.
- Substantiate time spent on each category.
- Test any substantially-all treatment using actual evidence.
Which fact changes the answer?
Direct supervision of qualifying experimentation differs from executive oversight of the whole company. The statutory threshold cannot be assumed from a technical background.
A mistake to avoid
General company management is not automatically direct research supervision.
Records that support the decision
- Calendar and project records.
- Role descriptions.
- Payroll and allocation workpaper.
The decision to document
Record the included wage amount and the service evidence supporting it, including any threshold relied upon.
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Related questions
- We want the research-credit payroll offset. Can the payroll provider elect it without the income-tax return?
- Our S corp generated a research credit. Is the owner's refund automatically equal to the credit amount?
Sources and editorial context
General educational information prepared with AI assistance. No individual professional review is claimed. Apply the relevant tax-year rules to the actual records. Editorial policy · AI disclosure.