{"id":2954,"date":"2020-04-12T16:28:10","date_gmt":"2020-04-12T16:28:10","guid":{"rendered":"https:\/\/burklandassociates.com\/?p=2954"},"modified":"2025-01-09T11:12:08","modified_gmt":"2025-01-09T19:12:08","slug":"startup-rd-tax-credit","status":"publish","type":"post","link":"https:\/\/burklandassociates.com\/2020\/04\/12\/startup-rd-tax-credit\/","title":{"rendered":"Does My Startup Qualify for R&D Tax Credit?"},"content":{"rendered":"

If your startup qualifies for the R&D tax credit<\/strong>, you may be able to deduct up to $250,000\/year in R&D expenses from your payroll tax or income tax. Read on to learn if your startup could qualify for the R&D tax credit.<\/em><\/p>\n

Would it surprise you to learn that the federal government is on your side when it comes to innovation? Yes, the same federal government that so loves to collect taxes from you is actually ready to give you at least some of that money back, in the form of a particular tax credit.<\/span><\/p>\n

Use Burkland’s Startup Tax Credit Calculator<\/a> to see how much your startup would save with the startup R&D Credit.<\/span><\/p>\n

The reason is simple: the government wants to retain U.S. leadership in the realm of technology. One of the instruments used to incentivize entrepreneurs to innovate is <\/span>the <\/span>Research and Experimentation (R&E) tax credit<\/span><\/a>, which allows companies to deduct many expenses directly related to research and development (R&D). <\/span>As you know, attempts at innovation are typically expensive and often go nowhere.\u00a0 Still, innovation remains a basic ingredient for sustainable growth in most industries. For this reason, the government\u2014through what is also known as the R&D tax credit\u2014helps make it less expensive to take the risks involved with innovation, especially for startups.<\/span><\/p>\n

\u00a0A good resource for understanding the details as to how startups can take advantage of this tax credit was published a few years ago in\u00a0<\/span>The CPA Journal<\/i>\u00a0by\u00a0<\/span>\u00a0<\/span>Yair Holtzman<\/a>, CPA, CGMA, and Partner and Leader of the <\/span>R&D Tax Credits Group<\/a> at <\/span>Anchin, Block & Anchin LLP<\/a>. Contact Yair Holtzman<\/a> or <\/span>Chris Noble<\/a>, Partner and Leader of Anchin\u2019s Technology and Services groups, for more information and to learn how an R&D study can help you.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

The article points to three main areas to consider: <\/span><\/p>\n

    \n
  1. Types of Qualified Research Expenses and the tests they must meet<\/span><\/li>\n
  2. Additional criteria for internal use software<\/span><\/li>\n
  3. Activities that do not fall within the parameters of qualified R&D activities (reproduced below in largely form)<\/span><\/li>\n<\/ol>\n

    Types of Qualified Research Expenses (QRE):<\/b><\/p>\n