Do you Qualify for the R&D Credit?
What is the R&D Credit?
The R&D tax credit is a dollar-for-dollar, non-dilutive tax incentive for US-based companies that innovate. Companies across industries can qualify, including early-stage startups and profitable companies.The IRS 4-Part Qualification Test
- Do you develop new or improved products or processes?
- Do you encounter technological challenges during development?
- Do you use “hard science” like engineering, biological, or computer science?
- Do you test multiple variables in an attempt to resolve your technological challenges?
Did you answer YES to all 4 questions?
Congrats, you qualify for the R&D tax credit! Let’s see how much you qualify for.Did you answer NO to any of the questions?
Let’s have a conversation and create an innovative plan to get you R&D credit.
Qualification for Federal R&D Tax Credit
In 1981, R&D tax legislation was passed, but in the years that followed it mostly benefited large enterprises with $100M+ in revenue. In 2015, the PATH Act gave small and medium-sized businesses access to R&D tax credits. For early-stage startups – Startups may use federal R&D credits against up to $250,000 of their payroll taxes in five separate taxable years—a total of $1.25M—if they have: Gross receipts less than $5M in the tax credit year and no gross receipts for any of the four preceding tax years. The credits can also be carried forward as an asset on their balance sheet until utilized.For mid-stage and mature companies – If a company has gross receipts over $5M or began bringing in sales over 5 years ago, it could qualify to offset unlimited income taxes with R&D credits.
Deeper Look at IRS 4 Part Test
Ardius are the experts when it comes to IRS Research & Development Credits. They helped us recover a significant portion of our R&D spend from the government in 2018 and 2019, and their team was wonderful to work with! The initial evaluation process was painless and the integration with our CPA was seamless. The question you should be asking yourself is, if you are a hardware company (startup or established) why have you not consulted with Ardius? You are leaving money on the table!"
Michael Yim,
Co-Founder
