Defined term
Business component
The product, process, software, technique, formula, or invention to which U.S. qualified research relates.
In U.S. research credit analysis, a business component is typically any product, process, computer software, technique, formula, or invention that the taxpayer holds for sale, lease, license, or use in its trade or business. Eligibility and expense mapping are often performed at the business-component level, including the shrinking-back rule when a larger component fails the tests but a subset may qualify.
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Educational definition only. Not tax or legal advice. Confirm current program rules with official guidance and a qualified adviser.