in-house research expenses
(2) In-house research expenses (A) In general The term “in-house research expenses” means— (i) any wages paid or incurred to an employee for qualified services performed by such employee, (ii) any amount paid or incurred for supplies used in the conduct of qualified research, and (iii) under regulations prescribed by the Secretary, any amount paid or incurred to another person for the right to use computers in the conduct of qualified research. Clause (iii) shall not apply to any amount to the extent that the taxpayer (or any person with whom the taxpayer must aggregate expenditures under subsection (f)(1)) receives or accrues any amount from any other person for the right to use substantially identical personal property. (B) Qualified services The term “qualified services” means services consisting of— (i) engaging in qualified research, or (ii) engaging in the direct supervision or direct support of research activities which constitute qualified research. If substantially all of the services performed by an individual for the taxpayer during the taxable year consists of services meeting the requirements of clause (i) or (ii), the term “qualified services” means all of the services performed by such individual for the taxpayer during the taxable year. (C) Supplies The term “supplies” means any tangible property other than— (i) land or improvements to land, and (ii) property of a character subject to the allowance for depreciation. (D) Wages (i) In general The term “wages” has the meaning given such term by section 3401(a). (ii) Self-employed individuals and owner-employees In the case of an employee (within the meaning of section 401(c)(1) ), the term “wages” includes the earned income (as defined in section 401(c)(2)) of such employee. (iii) Exclusion for wages to which work opportunity credit applies The term “wages” shall not include any amount taken into account in determining the work opportunity credit under section 51(a).