For CA businesses in multiple industries looking to reduce Federal and franchise tax liability.Estimate Your Credit
R&D tax credits, also known as the Research and Development credit, enable businesses to potentially reduce their federal income tax or franchise tax. Taxpayers might qualify for the credit if they paid for (or incurred) qualified research expenses.
Qualified Research Activities can include the below. As mentioned, all qualified activities must take place in the state of CA.
Find out if you qualify for the CA research credit.Contact Us
Properly claiming the R&D tax credit can be difficult without the right expertise - That’s where GOAT.tax comes in. Our R&D tax credit software identifies any qualified research expenses your company paid and qualified research activities to ensure you receive the largest refund possible.
These qualified expenses typically include employee compensation, contracted services, and materials. Typical forms needed for proof often include payroll records, detailed financial records, and vendor invoices.
All companies in California (regardless of industry, size, or revenue) that perform these qualified research activities must satisfy the following criteria of the IRS Four-Part Test as outlined in IRC §41(d):
In California, the carryover must be applied to the earliest tax year possible and the unused credit may be carried over until it is exhausted.
You can choose this alternative method on a timely filed original return. If at a later year you decide to cancel this method, you will need to receive approval prior to filing your original return. California does not allow the change to be made on an amended return.
The CA research credit requires that Form FTB 3523 be completed. While the Federal R&D Tax Credit allows for two primary calculation methods, the Regular Credit (RC) and the Alternative Simplified Credit (ASC), only the RC method is permitted in CA.