Did you know there are two methods to calculate the Research and Development (R&D) Tax Credit?
1. Regular Credit
The Regular Credit equals 20% of a taxpayer’s current-year qualified research expenses (QREs) that are in excess of a calculated base amount. This can be quite complicated depending on your tax situation.
2. Alternative Simplified Credit
However, you can avoid the headache of the regular credit by leveraging the Alternative Simplified Credit (ASC). The ASC is simply 6% of your total QREs (for your first three years of claiming the Credit).
How to Calculate the R&D Tax Credit
To calculate the R&D Tax Credit, you need to complete IRS Form 6765 and include it as a part of your company’s tax return. The challenge is, your CPA can’t do it without YOUR help – you need to give him/her your QREs. In addition, the Form can be a little tricky, that’s why we’re here to help. We can complete the Form 6765 for you in a matter of minutes. To easily fill out Form 6765, click on the below button to get started.
For a deeper dive into how to determine your QREs, check out the blog post, A Deeper Dive Into Qualified Labor.