How to claim R&D tax credit
To claim the R&D tax credit, taxpayers have two options. Businesses can claim the R&D tax credit on their tax return for a given year or by amending their prior returns to claim the credit. Taxpayers can file amended tax returns for up to three years prior to the current year. They can claim the credit on their tax return for the year in which the qualified expenses were paid or incurred. To claim the credit, the taxpayer needs to fill out IRS Form 6765, which is the Credit for Increasing Research Activities, for the year in which the qualified expenses were paid or incurred.
How to calculate R&D tax credit
GOAT.tax offers two methods for calculating the R&D tax credit - the Regular Credit (RC) Method and the Alternative Simplified Credit (ASC) Method. At GOAT.tax, taxpayers can choose the most preferable calculation method each year, and our team of experts can help determine the most advantageous calculation method for your business.
Businesses using the RC method should complete Section A of IRS Form 6765. Section B is designated for businesses that choose to use the ASC calculation method. Section C requires additional documentation related to your business structure and R&D activities. Section D is mandatory for small businesses that have elected to apply the payroll tax credit.
How can GOAT.tax assist your business
At GOAT.tax, our focus is on assisting businesses in claiming the R&D tax credit through expert guidance and support. With a team of more than 50 R&D tax professionals who have accumulated over 350 years of experience in streamlining the R&D tax credit process, we are well-equipped to help businesses efficiently claim the credit and maximize their benefits. Their advanced platform simplifies the complexities of claiming the tax credit, allowing businesses to streamline and automate the R&D credit process.
Outsourced Services/Contractor Expenses
It refers to expenses incurred by a business for hiring third-party contractors or consultants to perform research activities that qualify for the R&D tax credit. It's important to note that only a portion of contractor costs can be claimed as an R&D tax credit. The exact percentage that can be claimed depends on several factors, such as the type of activity performed by the contractor and the specific terms of the contract. However, in general, businesses can claim up to 65% of the qualified contractor costs for research activities as an R&D tax credit.
