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10,000 Startups: Legal Strategies for Startup Success – R&D Tax Credits (Podcast)

Attorney Roger Royse sets entrepreneurs up for success as he and his guests cover a wide range of legal considerations and complexities that alleviate burdens and identify opportunities for startup companies. Having practiced law in Silicon Valley since 1984 and working with startups since 1991, Roger has counseled thousands of companies on corporate, tax, intellectual […]

What are R&D Tax Credits and How Do They Work?

R&D tax credits were enacted to stimulate innovation and research investment in the United States. The stimulus provides material non-dilutive capital to companies that improves their cash flow through reduced federal and state taxes. Furthermore, companies can claim R&D tax credits each year, thus creating a significant reduction to future years’ federal and state tax […]

Unlocking Potential: How Manufacturing Companies Can Qualify for the R&D Tax Credit

In today’s highly competitive business environment, innovation is the driving force behind the success of manufacturing companies. Governments worldwide recognize the role played by manufacturers in promoting technological advancements and, as a result, offer Research and Development (R&D) tax credits to encourage investment in technical innovation. There are many ways manufacturing companies can qualify for […]

What Businesses are Eligible for the R&D Tax Credit?

The R&D tax credit is an incentive the federal government provides to businesses to encourage them to engage in research and development activities. Businesses must meet certain criteria set forth by the Internal Revenue Service (IRS) to be eligible for these credits. Businesses can take advantage of the R&D tax credit if they engage in […]

How Calculates Your R&D Tax Credits

For United States federal R&D tax credit calculations, there are two methods available to taxpayers – the regular credit (RC) calculation method and the alternative simplified credit (ASC) calculation method. Taxpayers are allowed to calculate the credit using both methods, then select whichever method provides the better result. The value of the R&D tax credit […]

R&D Tax Credits Expanded by The Inflation Reduction Act

The Inflation Reduction Act of 2022 signed into law by President Biden contains several provisions, including modifications to the payroll tax R&D credit for qualified small businesses (QSB). Current law allows QSBs to use R&D tax credits to offset social security payroll tax liability.  This provides an avenue for QSBs to see benefit from R&D […]

How to File Amended Tax returns for R&D Tax Credits

Taxpayers are allowed to file amended returns to reflect any changes or omissions from the original return if the amended return is filed within the three-year statute of limitations. Amended tax returns are an effective tool for capturing overlooked credits from prior years. There are many reasons a company, or individual, may decide to file […]

Substantiating Your R&D Tax Credit Claim

Companies claiming an R&D tax credit are required to have documentation to substantiate the value of the credit being claimed. The current record-keeping requirement is general and vague, and the IRS has not provided significant guidance as to what documentation is acceptable to substantiate R&D tax credits. Direction regarding substantiation must be gleaned from what […]

How to Capture R&D Tax Credits Beyond Wages – Qualified Supplies

To stimulate research investment in the United States, Congress initially provisioned a general business tax credit under Internal Revenue Code section 41 in conjunction with The Economic Recovery Tax Act of 1981. Although the most substantial investment in research and development is a company’s people (and subsequently their wages), the supplies they use to create, […]