R&D Tax Credits

You’re not alone, even though the credit has been around since 1981, it was typically reserved only for large corporations. It wasn’t until 2016 that the credit benefits were expanded and reporting requirements burden reduced, opening the door for millions of additional companies that didn’t have access before.

Yes, they can, but most CPA’s don’t have the resources or expertise needed to locate and capture the full value of your credits, which is why so many partners with specialists like us to handle that part of your return.

Absolutely! Considering the positive impact on your cash flows or bottom line and that your assessment can typically be completed in 90 minutes, this is the reason why this credit scoresvery well on something we call the “Good to Grief Ratio” which measures the value you receive vs. the time you have to put in to get that value.

This dollar-for-dollar credit can be claimed up to three years back, bringing in cash for those years, immediately helping any cash needs, and can be carried forward 20 years, reducing future taxes and therefore increasing your profitability and valuation. There is no limit on income tax credits, and we can go up to 1.25 million in payroll taxes for startups.

The government wants to keep innovation here in the United States by incentivizing companies to develop projects here. Also, the credit can be the deciding factor on whether to take on projects in which cost might normally prevent them from pursuing.

Contact us, and our experts will prescreen the business to help determine if you qualify before you spend any time going through our process

Regarding tax deduction vs. tax credit, the essential difference between deduction and credit is that a credit directly decreases the amount of tax you owe while adeduction lowers your overall amount of taxable income. A nonrefundable credit lets you reduce your tax liability to 0.

Yes, you get to double dip! Meaning you can expense the items like you normally would while also claiming the credit to get additional benefits.

No. It’s for all types of companies, many that don’t even realize are eligible.

The startup provision allows companies to claim credits against payroll taxes if they’re not paying income tax. This is great for pre-revenue firms that are spending a lot on product development but haven’t gone to market yet. We can decrease your burn rate by getting you money back. You can claim up to 250k a year, and up to 1.25 million in total.

No. It just needs to have:

1. Gross receipts less than $5 million in the taxable credit year.
2. No gross receipts for any taxable year preceding the 5-taxable year period ending with the taxable credit year.
3. R&D payroll tax credit can use in that year.

So even companies that have been around for more than five years and have spent billions of dollars to develop or improve any component could be eligible.

Yes. Although the law is intended to benefit small businesses, any company formed prior to 2012 that did not receive gross receipts could also potentially benefit.

The 4-part test consists of the 4 primary attributes used to determine if an activity qualifies for a credit. Each activity needs to have:

1. Qualified purpose
2. Technological uncertainty
3. Process of experimentation
4. Technological in nature

In other words, these activities must attempt to create or improve the process, have uncertainty on whether it will be a success or failure, be technical in nature, and have a process of experimentation.

There are three buckets of expenses that qualify: supply costs, contractor costs, and wages. Each of these costs must be assigned to a qualifying project for the expenses to be claimed.

The payroll tax offset is available on a quarterly basis beginning in the first calendar quarter that begins after a taxpayer files their federal income tax return.

The R&D payroll tax credit requirements vary by country and jurisdiction. It typically involves qualifying research and development activities and meeting specific criteria for eligible expenses and documentation.