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R&D Tax Credit
Pay less in taxes
Get a cash refund
The R&D tax credit is a general business tax credit available to any company that incurs R&D costs in the United States. It is normally applied to income taxes in the current year (or carried forward to future years) but for most startups, it can also be used to offset payroll taxes.
What is the
Is the R&D tax credit only a credit, or can I get a cash refund from the IRS?
Generally, the percentage return is at least 6%, but in most cases you can expect to get back around 10% of your expenses. In most
states there are additional amounts available through state R&D tax credits and incentives.
Four-Part Test for R&D eligibility:
How much is the credit?
The credit is a 6% minimum but our clients see an average credit of 10% on qualified R&D expenses.
To be eligible, an R&D project must be conducted in the USA and meet the following IRS criteria
R&D activities must meet the
Four-Part Test for eligibility:
Companies incur expenses associated with their R&D activities.
Four main categories are considered:
1. R&D wages
Qualified wages are those directly devoted to qualified research, as well as directly supervising and supporting qualified activities.
2. Cost of supplies
Materials & supplies that are rendered valueless during the process of experimentation (lab supplies, test materials, experimental molds, components of prototypes, scrap from experimental runs).
3. Contract research
Contract research expenses are payments incurred by the taxpayer to a third party (individual or company) for qualified research.
Only 65% of these expenses are allowed for credit calculation.
4. Basic Research
Payments to universities and research centers are also claimable and generate a higher credit.
R&D tax credits are an important source of non-dilutive financing.
If you conduct R&D, we will help you claim the benefit.
Focus on growing your business
Let Boostr help you claim the credit and get you a refund