An Open Source Tax Credit


If you’re a corporation and you develop software, you deduct your costs from your taxes. And, in many cases, you can take an R&D Tax Credit. But if you’re an individual and you develop open source software — i.e., Firefox or WordPress — you eat those costs.

Individuals developing open source software should have the same tax incentives as corporations, which is why we’ve developed a proposal for an Open Source Tax Credit.

The code is pretty simple: if you develop open source software on your own time, you should be able to deduct part of your out-of-pocket costs as a credit on your income taxes.

The cost to the government would be minimal, but we would take an important step in recognizing the contribution open source developers are making to our communities and our economy. You can read the full economic analysis of this proposal here. Let us know what you think.

Carl Malamud and John Irons