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R&D Tax Credits for AI-Generated Software Development 

CodeROI turns every AI-generated code change into audit-ready evidence for R&D tax credits, Section 174 capitalization, and Section G reporting. Its deterministic logic documents agentic and AI-assisted development in real time, so the record is contemporaneous from the first line of code.
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The Problem

AI Agents write code. But they don't document it for tax compliance.

AI-generated software development is growing fast, but the IRS still requires the same level of documentation for R&D tax credits and Section 174 capitalization, regardless of whether the code was written by a human or an AI agent.

No time tracking

AI agents do not record how long they spent on a code change, a review, or a pull request. Without time data, there is no defensible basis for wage-equivalent QRE allocation.

No ticket classification

AI-generated code changes are not classified as Feature, Bug, or Task work. Without classification, R&D eligibility analysis cannot distinguish qualified research from routine maintenance.

No project attribution

AI agents do not assign work to business components or projects. Section G of Form 6765 requires QREs broken out by business component. Without attribution, that reporting is impossible.

Mixed pull requests

AI agents frequently combine unrelated work types into a single change. A code change that mixes Feature and Bugs cannot be cleanly classified for R&D credit or capitalization purposes.

Here's how it works

Add your agent to CodeROI

Install in minutes and deliver value 

CodeROI brings AI agents into the same structured workflow your human developers already follow, wherever those agents write code, from VS Code to the terminal and beyond. Every commit an agent makes arrives with time, classification, and project attribution built in, with no change to how your team ships.

Step 1:  Your Agent joins the workflow

From the moment an agent starts work, it follows the same standards you hold your engineers to. Compliant from the first line of code, with no prompting or babysitting from your team.

Step 2: Every code change comes with full detail

Agent work is recorded with the same rigor as human work: time, classification, and project on every commit. Human and AI development are measured side by side in one system.

Step 3:  Reporting that covers your AI spend

Everything flows into the reporting you already rely on CodeROI for. R&D credits and capitalized labor now capture the full picture of how you build, human and AI together, with every number traceable to real work.
Capabilities

Built for R&D tax compliance from day one

Every feature exists because it solves a specific documentation, classification, or reporting requirement for R&D tax credits, Section 174, or Section G.

Automated time or effort recording

Actual working time, not wall-clock time, captured automatically at the code change level. Defensible effort documentation with zero timesheets.

Ticket type classification

Every code change classified as Feature, Bug, or Task. Clean classification enables accurate R&D eligibility analysis.

GitHub project mapping

Code changes assigned to one or more GitHub Projects automatically. Maps directly to Section G business-component reporting and project-level QRE allocation.

Clean PRs by design

Each code change stays scoped to one type of work and one project, so your development records are audit-ready as they're created.

Review time tracking

Time captured for code approvals and change requests, so supervision and review work count toward your credit too. Supports Section G wage classification.

Always current, zero maintenance

Rules and classifications stay up to date on their own. Nothing for your team to install, patch, or manage.

What this supports

AI development documentation for every compliance need

The same commit-level metadata supports multiple financial and tax compliance workflows with fresh data available at your fingertips.
  • R&D tax credits (Form 6765)
    Time-based QRE allocation for AI-generated development work. Commit-level classification feeds directly into qualified research expense calculations.
  • Section G business-component reporting
    Project attribution at the commit level maps AI development activity to business components for the new Section G disclosure requirements on Form 6765.
  • Section 174 software capitalization
    Structured development records support Section 174 and 174A treatment, immediate expensing for qualifying domestic work and amortization for foreign work, whether the code was written by a human or an AI agent.
  • Cap Labor reporting
    Time and project data from AI-generated commits feeds CodeROI's Cap Labor module for capitalizable labor cost tracking and reporting.
RD Tax Credits on AI and Humans by CodeROI
Frequently Asked Questions

AI agent R&D tax credit documentation

Can AI-generated software development qualify for R&D tax credits?

Yes. The R&D tax credit under IRC Section 41 applies to qualified research expenses whether the development was performed by a human or an AI agent. The requirements are the same: the work must meet the four-part test, and the expenses must be properly documented and allocated. CodeROI creates the structured, contemporaneous documentation needed to support those claims at the code change level.

How does the AI agent classify commits?

Every commit is classified as exactly one of three types: Feature (new functionality, enhancements, or meaningful improvements), Bug (fixes to incorrect or broken behavior), or Task (maintenance, cleanup, configuration, refactoring, or documentation). This classification is required for R&D eligibility analysis and must be consistent across the pull request.

Does this work with Section G of Form 6765?

Yes. Section G requires companies to report qualified research expenses by business component. CodeROI's AI Agent extension assigns every commit to one or more GitHub Projects, which map to business components. This commit-level project attribution feeds directly into Section G reporting, including wage QRE breakdowns by direct research, direct supervision, and direct support.

What AI coding agents are supported by CodeROI?

CodeROI is agent-agnostic. It works with any AI coding agent that commits to your GitHub repositories, wherever that agent runs. The workflow rules and metadata requirements are delivered centrally and apply the same way to every agent, so new tools your team adopts are covered automatically with nothing extra to configure.

Why is the extension cloud-backed?

CodeROI needs the ability to update workflow logic, classification rules, metadata formats, and validation requirements centrally over time. A cloud-backed extension allows these updates to be delivered without requiring manual local updates. It also supports future jurisdiction-specific requirements and evolving IRS compliance standards.

Does CodeROI access the source code?

No. CodeROI analyzes metadata about how the code was developed, not the proprietary source code itself. The AI Agent extension captures structured information about time, classification, and project attribution. It does not inspect, read, or transmit the actual code content.

Does Section 174 apply to AI-generated software?

Yes. Sections 174 and 174A apply to software development costs whether the code was written by a human or an AI agent. Under current law, qualifying domestic research costs can generally be deducted immediately under Section 174A, while foreign research costs are still capitalized and amortized. Both treatments require documentation of the underlying development activity, and CodeROI's code change level records provide that support for AI-generated work.

Don't lose another dollar of tax credits

AI agents should document their work the same way humans do

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