The R&D tax credit is a federal, and often state, tax credit that rewards qualifying research spend, engineering and product work that meets the IRS's four-part test, with a dollar-for-dollar credit against tax owed rather than just a deduction.
For companies using the Alternative Simplified Credit, it generally lands between 6% and 14% of qualified research expenses, depending on how many years of R&D spend the company has to base the calculation on. Qualifying expenses are mostly wages for people doing hands-on technical work: engineering, product development, testing. Sales, marketing, and routine maintenance don't count.
The credit is often left unclaimed because founders assume it's only for companies with a dedicated R&D department, but the four-part test is about the nature of the work, not the org chart. A five-person engineering team building a new product can qualify the same as a formal lab. A pre-revenue or early-revenue startup can also apply up to $500,000 of the credit against payroll tax instead of income tax, which matters since most early companies don't owe income tax yet.
Prepared by the same team that keeps your books, with credits you may already be owed caught along the way. Built by founders, investors, CPAs and startup people.