R&D Tax Credit Estimator

The federal R&D tax credit rewards qualifying research spend — engineering and product work that meets the IRS's four-part test — with a credit against tax owed: 6% of qualified research expenses with no R&D history to base the calculation on, or 14% of QRE net of a base amount once there's an established program — which nets out closer to 7% of current-year QRE for a program with roughly steady spending, and only approaches 14% for one growing fast relative to its own recent history.

A team of 8 engineers averaging $125,000 in salary, spending about 37.5% of their time on qualifying R&D work, has roughly $375,000 in qualified research expenses — putting the estimated credit range between about $22,500 and $26,250 for a first-time or steady-spend claim.

For the full breakdown — who qualifies, what expenses count, the payroll tax offset for pre-revenue companies, and answers to the most common questions — see the complete R&D tax credit guide.