Our Services
R&D Tax Credit for Startups
Developing new products, improving technology, testing new processes, or solving technical challenges may involve qualifying research activities. We Accountant helps startups review potential R&D activities, identify qualifying expenses, document the credit, and understand whether the credit may be available against income or payroll taxes.
Need help deciding?
Talk to our team about which service fits your business, no commitment required.
What Is the R&D Tax Credit?
The federal Research and Development Tax Credit, formally called the Credit for provides a tax incentive for certain businesses that incur qualified research expenses.For qualifying startups and small businesses with limited income-tax liability, federal rules may allow a portion of the research credit to be elected against certain employer payroll taxes.
Why Startups Should Look at R&D
Startups often associate R&D with laboratories or scientific research. In reality, potentially qualifying activities can arise in technology development, engineering, product development, software, manufacturing, and other technical work when the applicable requirements are met.
Product Development
Developing or improving products through technical experimentation may involve activities worth reviewing.
Software Development
Certain software development activities may qualify when they satisfy the applicable research requirements.
Technical Problem-Solving
Resolving technical uncertainty through systematic experimentation may be relevant to an R&D credit analysis.
Process Improvement
Developing or improving processes may qualify in certain circumstances when the required criteria are met.
Our R&D Tax Credit Process
Understand Your Activities
We learn about your products, technology, development processes, employees, and technical challenges.
Identify Qualifying Activities
We examine your research activities against the applicable requirements to identify potentially qualifying work.
Calculate the Credit
We analyze applicable qualified research expenses and calculate the potential credit based on the relevant tax rules.
Document & Claim
We organize the supporting information and assist with the applicable tax forms and credit election.
Works with the platform you already use
Setup, migration, and ongoing support across the following platforms.
Frequently Asked Questions
Not necessarily. Certain qualified small businesses may elect to apply a portion of the research credit against eligible employer payroll taxes, subject to the applicable requirements.
An eligible qualified small business may elect to use a portion of its research credit against certain employer payroll taxes. The election and eligibility requirements must be satisfied.
For tax years beginning after December 31, 2022, the maximum payroll-tax research credit election is $500,000, but the actual credit depends on the business's qualified research expenses, eligibility, and applicable limitations.
No. Software development does not automatically qualify. The specific activities must meet the applicable requirements for qualified research.
Depending on the circumstances, qualified research expenses may include certain employee wages, supplies, and contract research expenses.
Form 6765 is used to calculate and claim the research credit and make the qualified small business payroll-tax election. Form 8974 is used to determine the payroll-tax credit claimed on the applicable employment tax return.
Why choose us
Think Your Startup May Be Doing Qualifying R&D?
Don't leave potentially valuable tax incentives unexplored. Let WeAccountant review your research activities and determine whether an R&D tax credit analysis makes sense for your business.