domestic production activities

It's not so much that it is a software company but whether the company is producing "computer software" that generates income from sale or licensing. Treasury Reg. 1.199-1(j)(3) has the definition of computer software:

==============¾gin Text=================3) Computer software ?(i) In general. The term computer software means any program or routine or any sequence of machine-readable code that is designed to cause a computer to perform a desired function or set of functions, and the documentation required to describe and maintain that program or routine. Thus, for example, an electronic book available online or for download is not computer software. For purposes of this paragraph (j)(3), computer software also includes the machine-readable code for video games and similar programs, for equipment that is an integral part of other property, and for typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, regardless of whether the code is designed to operate on a computer (as defined in section 168(i)(2)(B)). Computer programs of all classes, for example, operating systems, executive systems, monitors, compilers and translators, assembly routines, and utility programs, as well as application programs, are included. Except as provided in paragraph (j)(5) of this section, if the medium in which the software is contained, whether written, magnetic, or otherwise, is tangible, then such medium is considered tangible personal property for purposes of this section.

(ii) Incidental and ancillary rights. Computer software also includes any incidental and ancillary rights that are necessary to effect the acquisition of the title to, the ownership of, or the right to use the computer software, and that are used only in connection with that specific computer software. Such incidental and ancillary rights are not included in the definition of trademark or trade name under §1.197?2(b)(10)(i). For example, a trademark or trade name that is ancillary to the ownership or use of a specific computer software program in the taxpayer's trade or business and is not acquired for the purpose of marketing the computer software is included in the definition of computer software and is not included in the definition of trademark or trade name.

(iii) Exceptions. Computer software does not include any data or information base unless the data or information base is in the public domain and is incidental to a computer program. For this purpose, a copyrighted or proprietary data or information base is treated as in the public domain if its availability through the computer program does not contribute significantly to the cost of the program. For example, if a word-processing program includes a dictionary feature that may be used to spell-check a document or any portion thereof, then the entire program (including the dictionary feature) is computer software regardless of the form in which the dictionary feature is maintained or stored. ===========End Text================ My interpretation of the first sentence is that a "website" consists of machine readable code designed to perform a desired function or set of functions and would be qualified production property. I don't believe design of the company logo would fulfill that requirement. It sounds more like the example given of an electronic book.

Also note, that self-employed taxpayers are not eligible unless they have employees who are paid W-2 wages.

It's not so much that it is a software company but whether the company is producing "computer software" that generates income from sale or licensing. Treasury Reg. 1.199-1(j)(3) has the definition of computer software for the credit:

==============¾gin Text=================3) Computer software ?(i) In general. The term computer software means any program or routine or any sequence of machine-readable code that is designed to cause a computer to perform a desired function or set of functions, and the documentation required to describe and maintain that program or routine. Thus, for example, an electronic book available online or for download is not computer software. For purposes of this paragraph (j)(3), computer software also includes the machine-readable code for video games and similar programs, for equipment that is an integral part of other property, and for typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, regardless of whether the code is designed to operate on a computer (as defined in section 168(i)(2)(B)). Computer programs of all classes, for example, operating systems, executive systems, monitors, compilers and translators, assembly routines, and utility programs, as well as application programs, are included. Except as provided in paragraph (j)(5) of this section, if the medium in which the software is contained, whether written, magnetic, or otherwise, is tangible, then such medium is considered tangible personal property for purposes of this section.

(ii) Incidental and ancillary rights. Computer software also includes any incidental and ancillary rights that are necessary to effect the acquisition of the title to, the ownership of, or the right to use the computer software, and that are used only in connection with that specific computer software. Such incidental and ancillary rights are not included in the definition of trademark or trade name under §1.197?2(b)(10)(i). For example, a trademark or trade name that is ancillary to the ownership or use of a specific computer software program in the taxpayer's trade or business and is not acquired for the purpose of marketing the computer software is included in the definition of computer software and is not included in the definition of trademark or trade name.

(iii) Exceptions. Computer software does not include any data or information base unless the data or information base is in the public domain and is incidental to a computer program. For this purpose, a copyrighted or proprietary data or information base is treated as in the public domain if its availability through the computer program does not contribute significantly to the cost of the program. For example, if a word-processing program includes a dictionary feature that may be used to spell-check a document or any portion thereof, then the entire program (including the dictionary feature) is computer software regardless of the form in which the dictionary feature is maintained or stored. ===========End Text================ My interpretation of the first sentence is that a "website" consists of machine readable code designed to perform a desired function or set of functions and would be qualified production property. I don't believe design of the company logo would fulfill that requirement. It sounds more like the example given of an electronic book.

Also note, that self-employed taxpayers are not eligible unless they have employees who are paid W-2 wages.

OK, so website and logo design might not qualify. But here's a workaround: Just add some computer program feature to the website you design, such as an email us page, or maybe even login capability, and voila domestic production activities deduction.

You misinterpreted what I said. I said "that a website consists of machine readable code designed to perform a desired function or set of functions and would be qualified production property". Or simply put.. it meets the definition of computer software and that makes it eligible for the credit.