Estimate Your R&D Tax Credit

Calculate R&D Tax Credits with three simple questions.
Find out how much you qualify to receive from the IRS.
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your projected credit

Based on your responses, we believe that you are not currently eligible for the R&D Tax Credit

Please check back with us if you perform any product or software development-related work in the future.



your projected credit


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you’re ineligible

Based on your responses, we believe that you are not currently eligible for the R&D Tax Credit

Please check back with us if you perform any product or software development-related work in the future.

Which R&D Activities Qualify?

Creating improved products, processes, formulas, software, and techniques
Mobile application development
Developing prototypes, first articles, models
Automating or improving internal manufacturing processes
Internet of Things (IoT) development
Evaluation of alternative materials
Designing tools, jigs, fixtures, and molds
Development of data center, big data, and data mining tools
Development of firmware
Integrating new equipment
Integration of APIs and other technologies
Network hardware and software development and optimization
Development of software and firmware
Manufacturing new or improved products
Developing simulators

Which R&D Industries Qualify?

Architecture & Engineering
Tool & Die
Food & Beverage
Contract Manufacturing
Metal Fabrication
Financial Services
Plastics/Injection Molding
Mortgage & Banking
Oil and Gas
Consumer Products
Blockchain Development
Software Development
Game Development
Any industry that develops or improves processes or products
Estimate Your R&D Tax Credit

For 2016 and subsequent tax years, businesses can use their R&D tax credits to offset payroll tax providing they meet the following requirements:

Gross receipts 1 for 5 years or less, which means total revenue returns and allowances, including all amounts received for services, income from investments, bank interest, and all other incidental or outside sources.
Less than $5 million in gross receipts in the year the R&D credit is claimed
Qualifying research activities and expenditures

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How does the R&D tax credit work?

Companies engaged in qualified research and development activities can claim a tax credit against their federal income tax. They do this by filing Form 6765 with their tax return, listing eligible expenses and calculating the credit amount. The credit essentially reduces their tax liability dollar-for-dollar based on the qualified expenses.

Is the R&D tax credit worth it?

For eligible companies, the R&D tax credit can be highly valuable. It provides direct financial savings, boosting cash flow and potentially increasing profitability. It can also incentivize further R&D investment, ultimately contributing to innovation and business growth.

What expenses qualify for R&D tax credits?

Eligible expenses typically fall into three categories:
1. Wages and salaries: Payments to employees directly involved in R&D activities.
2. Supplies: Costs of materials and equipment used solely for R&D.
3. Contract research: Fees paid to third-party companies for R&D services.

What are the four criteria for R&D tax credit?

Any company that wants to claim the R&D tax credit must satisfy each of the below criteria of the IRS Four-Part Test (IRC §41(d)). This applies to every company regardless of size, industry, or revenue.
1. Business Component Test
2. Technological Uncertainty Test
3. Process of Experimentation Test
4. Technological in Nature Test

Read More about the IRS Four-Part Test

Why should I apply for the R&D tax credit?

There are several benefits to claiming the R&D tax credit. These benefits include:
• Increased cash flow and significant savings
• Reducing your Federal taxable income rate
• Federal and State dollar-for-dollar income tax reduction
• Ability to claim the credit for open tax years going back 3 to 4 years

Is there a limit to the amount of the federal research credits that can be claimed?

There is no limitation on the amount of R&D tax credits that can be claimed each year.

Is the R&D Credit a refundable credit?

The credit is not refundable. Any Research & Development Credit that is not used to offset the taxpayer’s tax liability for the year in which the qualified research expenses were paid or incurred can be carried back one year. The remaining amount can be carried forward for up to twenty years.

Can the R&D Tax Credit be claimed for a prior year?

Yes, taxpayers can claim credits for prior tax years. They generally have three years from the original filing date to amend their tax returns. In some cases, the period available for amending may extend beyond three years.

How long can you carry forward R&D tax credits?

R&D tax credits can be carried forward for up to 20 years. This means that if you have any unused credits in a tax year, you can apply them to reduce your tax liability in future years for up to two decades.

There is also a one-year carryback option. This allows you to claim unused credits on your tax return for the preceding year, potentially resulting in a tax refund.

How is the R&D Credit computed?

There are two general methods for calculating the Research Tax Credit:
1. The Regular Credit (RC) Method
2. The Alternative Simplified Credit (ASC) Method.

Both of these approaches are included on IRS Form 6765, titled “Credit for Increasing Research Activities.” Taxpayers have the option to choose either method when filing a timely tax return. However, it’s crucial to understand the unique advantages and disadvantages of each approach, especially because once a method is elected, it cannot be changed on an amended return.