Learn how to get the

Research &

Tax Credit for 2024

Find out if you qualify!

Are you developing or improving a product, process, formula, or software? *
Does your work rely on physical, biological, computer, or engineering sciences? *
Do you evaluate one or more alternatives during your development? *
Are you asking questions like "How do we develop it?" or "Do we have the capability to develop it?" *

Terms of Service *

Save thousands of dollars in taxes

All thanks to the work you’re already doing.

Research & Development
Tax Credit

The R&D credit does the following:

  • Reduces your federal and state tax liabilities for the current year as well as future years
  • Lowers your business’s effective tax rate
  • Allows you to keep more of your profits
  • Small businesses can use the R&D credit to offset the FICA portion of payroll taxes.

Talk with our

Tax Experts today!

What if you could save thousands of dollars in taxes – all thanks to the work you’re already doing? Through R&D tax credits, you can.

Are You Eligible?

Do you need to be a scientist to be eligible for R&D tax credit? NO

R&D tax credits are available to all organizations that engage in certain activities. Opportunities also exist in industries that are not known for conducting R&D activities like Software development, Agriculture, Architecture, Construction, and Engineering, Restaurants, Retail.

If you are conducting qualified research and development projects, it is beneficial to claim the R&D tax credit regardless of your company’s taxable income. R&D tax credits can be carried forward to offset future income tax liability. Typically, credits that cannot be used immediately will carry forward for up to 20 years. Also, companies can often claim the R&D tax credit retroactively by filing amended returns.

Examples of R&D activities include but are not limited to the following:

  • Developing or engineering a new or improved product, process, formula, or software
  • Evaluating the feasibility of a product, process, formula, or software
  • Developing engineering architecture
  • Developing experimental models & prototypes
  • Testing an experimental product, process,formula, or software
  • Beta testing
  • Improving processes or the manufacturability of a product
  • Technical design reviews
  • Participating in technical meetings
  • Documenting the results of research
  • Maintaining research equipment
  • Compiling research data
  • Fabricating experimental models
  • Experimenting with innovative technologies
  • Creating more efficient and environmentally
    friendly designs
  • Supervising technical personnel engaged in R&D

R&D Tax Credit Criteria

Qualified Purpose

To develop a new or improved business component including product, process, software, technique, invention, or formula to enhance functionality, performance, reliability, or quality.

Technological in nature

The business component’s development must be based on a hard science, such as computer science, engineering, biological sciences, or the physical sciences, including testing, developing models, software, patents, or prototypes.

Technical Uncertainty

From the outset, the organization must have faced technological technical uncertainty when designing or developing the business component. For example, this technical uncertainty can be related to the capability or methodology of the development or improvement, or the appropriateness of the design.

Process of experimentation

The company must have evaluated multiple design alternatives or employed a systematic trial and error approach to overcome the technological uncertainties.

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Claiming the R&D tax credit could become easier by maintaining proper documentation.
Learn what documents you will need to get the claim.

  • Payroll information and timesheets for employees directly involved in R&D and for employees or managers supervising them
  • General ledger reports listing which business expenses and supplies were related to R&D
  • Copies of contracts and invoices paid to any contractors who do third-party research for you
  • Timekeeping records for work plans, payroll, meetings, and any other activities to prove they were related to R&D
  • Design drawings, test records, blueprints, progress reports, marketing materials and any other documentation that shows the process and impact of your research

Fostering America Innovation & Job Creation

White paper for 2024 on Research & Development Tax Credit.

Download for FREE

Fostering America Innovation & Job Creation

White paper for 2024 on Research & Development Tax Credit.

– FAQ’s

What is the R&D tax credit?

Established in 1981, this incentive rewards US-businesses for investing in research and development (R&D) activities. This incentive lowers the income tax liability for businesses that develop new or improve existing products, processes, software, or formulas.

How do I know if I qualify?

The definition of qualified activities is pretty broad. Because of this, there is no cookie cutter industry or company profile that determines eligibility. If you have developed a product, process, software, or formula that relies on either physical, biological, engineering, or computer science, it’s very likely you qualify.

How much is it worth?

The credit is generally worth 10% of your qualified expenditures such as wages, contractors, hosting and infrastructure, and supplies.

How do I use this credit?

The R&D tax credit is designed to lower a company’s tax liability. For established businesses, it is used as a direct dollar-for-dollar reduction of your income tax liability.

If you’re a startup, you may have the option to use this credit against the employer’s portion of social security taxes up to $250,000 per year. To be eligible as a qualified startup, you must be within your first five years of gross receipt, and be under $5 million in gross receipts for the tax year in consideration.

I won’t have an income tax liability for this year. Is it still worth it to claim this credit?

Yes! These credits have a 20 year carry forward period to be used against future income tax liabilities.

How do I claim this credit?

You claim this credit by filing an additional tax form along with your company’s annual tax filing. Occams will prepare the necessary additional tax forms for you, and you will provide them to your CPA to be filed alongside your annual filing.

I’ve never claimed this credit before. Can I go back and claim for previous years?

You can amend previous tax returns to claim any unclaimed credits. Based on the statute of limitations for amending previous returns, you can go back up to 3 years to claim the R&D credit.

In doing so, you may potentially get a refund based on income taxes you paid in those years, or you can carry forward those credits to future years.

I already have a CPA. Is this something they can do for me?

Great! We partner with hundreds of CPAs to help their clients claim these tax incentives. We find this to be a bit of a specialty service – think of your CPA as a general practitioner, and Occams as a cardiologist.

Occams does not file any forms on your behalf – we prepare all the necessary forms to be included with your annual filing. In this case, you would pass along our work to your CPA, and we’ll work with them as needed to make sure everything gets done accordingly.

Is this a one-time thing?

No. This credit can be claimed for every year in which you incur R&D expenses. There is no limit to the number of times you can claim this credit, and there is no cap on the amount.

What is the process to claim the credit?

There are two important parts to an R&D tax credit study: substantiation and calculation. Our team of experts will help you build the case for why you qualified for the R&D credit (substantiation), and work with you build the financial framework to calculate your credit. We try to take on most of the heavy lifting so you don’t have to. The timeline varies from company to company, but traditionally a study takes about 3-4 weeks.

What do I do if I get audited?

As long as your filing does not contain errors, you are guaranteed to receive a credit based on the expenses you claimed. However, the IRS may request documentation to prove that your expenses meet the criteria for qualified research. This is what we’re building during our process.

We make sure your R&D claim is bulletproof. Even if the IRS disagrees with the amount of your credit, they won’t charge you penalties or interest, just the difference in calculation.