Take Advantage of the R&D Tax Credit
Clickfunds Credit Filing Service allows businesses to offset their tax liability for day to day activities.
Claim the R&D Tax Credit, with None of the Headache
We’ll take care of the heavy lifting to assure your business maximizes its federal and state tax incentive while sparing you time and frustration.
Full R&D Credit Service Coverage
We tackle the full R&D credit process for you, including identifying qualified research expenditures, preparing the necessary paperwork, and filing your claim.
Reliable IRS R&D Credit Compliance
Our meticulous approach of conducting interviews, gathering expense-related data, and substantiating our findings assures your claim is compliant.
Year-Round R&D Credit Support
We work with you year-round to maximize your R&D tax credit, identify procedural improvements, and recommend additional tax incentives you qualify for.
R&D TAX CREDIT BASICS
What is the R&D Tax Credit?
The Research and Development (R&D) Credit rewards businesses for developing or improving their products, services, and processes. It amounts to a dollar-for-dollar reduction of their tax liability based on qualified expenses — including supplies, equipment, wages, and third-party services.
At A Glance
Provide Up to $32,220 Per Self-Employed Individual
Based on Sick Leave Equivalent and Family Leave Equivalent Amounts
Apply to Q2 (2020) Through Q3 (2021)
With Up to 20 Sick Leave Days and 110 Family Leave Days
May Be Claimed Retroactively For a Limited Time
The deadlines are April 15, 2024, and April 15, 2025.
At A Glance
Attempts to Eliminate Uncertainty Are Made
Aesthetic improvements would not qualify.
Processes of Experimentation Exist
Such as Modeling, Simulation, or Systematic Trial and Error
Activities Are Technical in Nature
Such as Biology, Chemistry, Computer Science, Engineering, or Physics
Purposes of Activities Qualify
R&D TAX CREDIT ELIGIBILITY
Who Is Eligible for the R&D Tax Credit?
R&D tax credits are available to any businesses that incur Qualified Research Expenditures (QREs) while operating in the US. The IRS has defined a four-part test to help businesses determine whether they are eligible, and state R&D credit programs generally follow the IRS’s guidance.
R&D TAX CREDIT FILING PROCESS
How Claiming the R&D Tax Credit Works
Self-employed individuals who had to take time off in 2020 or 2021 because of COVID-19 are likely to qualify for the SETC tax credits provided by the FFCRA.
Initiate Discovery Process
We conduct a full analysis of your business’s operations to identify research projects that can be claimed toward the R&D tax credit.
Interview and Substantiate
We interview personnel and work with your CPA and accounting staff to gather expense-related data and documentation.
Review and File Claim
We complete our calculations and substantiations, finalize an executive report, and work with your team to assure your claim is filed smoothly.
Maximize Benefit Each Year
We partner with our clients to identify other tax incentives and share procedural recommendations to help maximize their benefit each year.
R&D TAX CREDIT FAQS
Frequently Asked Questions, Answered
Are there state-level R&D tax credits?
Yes, there are currently 38 states that recognize the R&D tax credit. These states typically follow the IRS’s guidelines on qualified research expenditures (QREs) — with some exceptions. Fortunately, state R&D tax credits may be combined with federal R&D tax credits. When you work with us, we consider state and federal tax incentives during initial discovery.
How much money can you recover from the R&D tax credit?
There is no cap on the amount your business can claim in R&D tax credits. Since R&D tax credits are determined by the size and scale of your business’s technical activities — the more you spend, the more you save. Most businesses recover about 10% of their qualified R&D tax credit expenditures.
What are some examples of technical activities that qualify for the R&D tax credit?
Examples of technical activities that qualify for the R&D tax credit include:
- Developing Consumer Products
- Developing Software or Mobile Applications
- Developing New Processes or Techniques to Manufacture Products
- Improve the Performance, Functionality, Quality, or Reliability of Existing Products
- Designing Prototypes
- Testing Competitors’ Products
- Conducting Research that Speeds Up Your Time-to-Market
- Implementing New Process Automations
- Implementing Process Improvements that Reduce Waste or Improve Efficiency
- Developing Formula Improvements for Food, Beverage, or Chemical Applications
- Creating Patentable Products or Processes
What expenditures qualify for the R&D tax credit?
Examples of expenditures that qualify for the R&D tax credit include:
- Employee Wages
- Consultants’ Fees
- Material Costs
- Cloud Storage Subscriptions for Testing Environments
Note that expenditures must be related to research projects conducted in the US. Expenditures made in foreign countries do not qualify.
How is the R&D tax credit monetized?
The R&D tax credit is generally used to offset federal income taxes. If the credit is not fully utilized the year it is generated, businesses may carry it back one year for a tax refund. If excess credit is still available, businesses may carry it forward up to 20 years. Startups that are not yet profitable may apply the credit toward federal payroll taxes to offset up to $500,000 each year for up to five years (a total of $2.5 million).
We’re Ready
When You Are
Submit an R&D credit application online today to start the conversation.