R&D Tax Credit (R&D)
Research & Development Tax Credit Processing (R&D)
Only One in Three Eligible Companies are Claiming What They’re Entitled To
Two Ways to Get Started:
AdvanStaff HR and its R&D Tax Credit Partner StrikeTax Advisory make
it easier than ever to explore, apply, and claim your R&D tax credits.
Why pay the IRS? When the IRS can pay you.
Originally established in 1981 but enacted as a permanent program in 2015, the research and development tax incentive encourages US-based businesses to innovate and continue investing in ideas and technology. While this credit is substantial and one of the most lucrative governmental credits, many companies have yet to begin claiming all that they qualify for.
Claim the R&D Tax Credits You’re Owed:
- More Capital for Innovations
Reinvest in your business. Use the R&D tax credit to position your company for its next leap forward. - More Money for Payroll
Small businesses with less than $5M in gross receipts in one year, and with less than five years of gross receipts, can reduce their portion of payroll taxes. - More Job Creation
Created to spur on American job creation, the R&D tax credit gives you the funds you need to hire more employees and grow your business.
How Do I Know if I Qualify for R&D Tax Credits?
Companies must pass the 4-Part Test:
- Does your company engage in research that imparts new or improved functionality, performance, reliability, or quality to a product, process, formula, invention, software, or technique?
- Are there activities in your company that clearly demonstrate a process of experimenting with the intent to resolve technical uncertainty through the systemic evaluation of alternatives?
- Do the activities in your company rely on principles of hard sciences, including physics, biology, engineering, chemistry, or computer science?
- Does the development team encounter technical uncertainties around the best design, methodology, or capability in order to meet project specifications?
If it’s new to you, then it likely qualifies as R&D. Starting a new process, developing a new app, or creating a new formula are all examples of qualifying research and development activities.
The IRS’s Definition of R&D
Refuel Your Innovations
AdvanStaff HR and our R&D tax credit partner work together to uncover the credits you deserve and reward you for your innovations. AdvanStaff HR handles the reporting, and our R&D tax credit partner compiles the necessary documentation to file and claim your credits.
Our partner works on a success-based fee structure. They don’t get paid until you receive your credits.
They work for your success!
Common Misconceptions About Claiming the R&D Tax Credit:
- My company isn’t inventing anything new.
The definition of research and development is broader than you may realize. If your company is engaged in the process of experimentation, or creating something new to you, your R&D efforts may qualify. - My company isn’t paying federal income tax yet, so we can’t apply.
The 2016 PATH Act allows qualified small businesses to use federal credits to offset their future payroll tax, even if they’re not currently paying federal income taxes. - We don’t qualify because we are subjected to the Alternative Minimum Tax (AMT).
The PATH Act opened up the R&D tax credit for more small businesses. Now, eligible businesses can apply the tax credit against their AMT liability. - My CPA would’ve already applied for it if we qualified.
The R&D tax credit is a small part of the tax code, and your CPA may not know the intricacies, or feel confident, about applying for R&D credits. Partnering with a specialty R&D firm gives your existing financial support team the bandwidth to take care of your standard tax needs, letting the experts focus on your specific R&D tax potential. - I don’t want to increase my company’s chances of an audit.
IRS guidelines do not specifically target companies that claim the R&D tax credit. Filing a well-documented and timely R&D claim is your best avenue for preventing an audit. It can be in your best interest to also work with a specialty R&D tax firm that guarantees you audit protection.
Frequently Asked Questions
How much will claiming these credits cost me?
AdvanStaff HR’s R&D tax credit partner charges no fees until you get or utilize your credit. There is no upfront fee for our partner to identify and claim the credits you are owed.
Once tax credits are identified, you have two fee options for claiming your credit:
- 25% of the total credit paid upon the time you actually claim the credit. You don’t pay until you get paid. Credits can be carried forward for a total of 20 years.
- 20% of the total credit at time of delivery. You pay a discounted fee inn advance of claiming the credit. If for somme reason you are unable to claim the credit due to a fault of our tax partner, the pro-rated amount of the fee will be refunded to you.
Will claiming R&D Tax Credits increase my chances of an IRS audit?
No. When the R&D tax credit is claimed correctly on a timely-filed tax return, it doesn’t make an audit more likely. AdvanStaff HR’s R&D tax credit partner documents claims thoroughly, submits them timely, and has never lost a dispute.
My company hasn’t realized a profit yet. Can I still claim the credit?
For qualified small businesses, the current-year federal R&D tax credit can be applied toward future payroll taxes. Companies don’t need to be profitable; they simply need to have qualifying research activities.