Federal R&D Tax Credit Services
Turn innovation into dollar-for-dollar tax savings
Trusted by high-growth startups
What is the Federal R&D Tax Credit?
Dollar-for-dollar tax credits for businesses developing new products, processes, software, or technologies. Failed experiments count—the government rewards innovation attempts, not just successes.
For Startups
Offset up to $500K in payroll taxes annually, even if unprofitable (under $5M revenue, <5 years operating)
For All Businesses
Credits reduce federal tax liability or carry forward 20 years / backward 1 year
Qualifying Activities
Software development, product testing, algorithm optimization, technical problem-solving where outcomes weren't certain
Calculation Methods
Regular Research Credit (RRC)
Alternative Simplified Credit (ASC)
How It Works
Discovery & Analysis
We analyze your activities to identify qualifying research
- Review wages, supplies, computer leases, contract research costs
- Identify eligible projects where technical uncertainty existed
- Interview technical staff to understand innovation processes
- Document development methodologies and testing procedures
Calculate & Optimize
Calculate maximum credits using optimal methodology
- Compare RRC vs ASC methods to maximize your credit
- Organize documentation by business component
- Calculate federal and state credits simultaneously
- Identify opportunities for future year optimization
Form 6765 & 8974 Preparation
Complete all required forms with audit-ready documentation
- Form 6765 for general business credit calculation
- Form 8974 for payroll tax offset (qualified small businesses)
- Section G business component detail (mandatory 2025+)
- Supporting schedules and technical narratives
State Credit Determination
Evaluate eligibility for state R&D credits
- State-specific forms and calculations
- Coordinate with federal filings
- Identify multi-state opportunities
- Optimize combined federal and state benefits
Filing & Monitoring
Include in tax filings and monitor regulatory changes
- Coordinate with tax preparers for seamless filing
- Track regulatory updates and Section G requirements
- Prepare for potential audits with comprehensive records
- Set up systems for next year's credit calculation
Common Mistakes to Avoid
Not Claiming Failed Experiments
Missing 20-40% of potential credits by only claiming successful R&D projects
Failed experiments qualify—we document all eligible attempts, not just successes
Missing Software Development Credits
Software companies leaving $50K-$200K on table by assuming only hardware/biotech qualifies
Code development, UX testing, and algorithm work all qualify—we capture these activities
Inadequate Documentation
Risk of credit disallowance or audit penalties without Form 6765 Section G documentation
We prepare audit-ready documentation by business component meeting IRS standards
Waiting Until Tax Time
Missing eligible expenses and rushed documentation by starting R&D credit work during tax preparation
Year-round tracking and quarterly reviews maximize credits and improve documentation
Why Choose Finvisor for R&D Tax Credits
As your fractional CFO partner, we integrate R&D credit work with existing financial services
Lower Fees
~12.5% of credits (1.25% of QREs) vs 20% industry standard—leveraging our existing relationship
Deep Integration
Real-time Slack communication, part of your team—not an outside consultant
Comprehensive Service
Study, calculation, forms, documentation, and compliance—complete end-to-end support
Frequently Asked Questions
Do I need patents or scientific breakthroughs to qualify?
No. Software development, product testing, and technical problem-solving where outcomes were uncertain all qualify. Most startups qualify without patents. The IRS focuses on the process of experimentation, not the results.
What if my R&D projects failed?
Failed experiments qualify. The IRS rewards innovation attempts, not just successes. We document all qualifying activities, whether they succeeded or not. In fact, failed experiments often provide the strongest evidence of technical uncertainty.
Can unprofitable startups claim R&D credits?
Yes. Qualified small businesses (under $5M revenue, less than 5 years operating) can offset up to $500K in payroll taxes annually through Form 8974, even with no income tax liability.
What is Form 6765 Section G?
New IRS requirement starting 2025 (optional 2024) requiring detailed business component information for 80% of qualified research expenses. We handle all required documentation including project descriptions, technical uncertainty narratives, and process of experimentation details.
How much does Finvisor charge?
Approximately 1.25% of qualified research expenses (which equates to roughly 12.5% of credits), significantly less than the 20% industry standard. Our lower fees leverage the existing accounting relationship we have with you.
What activities qualify as R&D?
Software development, algorithm optimization, product testing, technical experimentation, UX testing, process improvements—any activity involving technical uncertainty where you had to experiment to achieve results. If you weren't sure it would work when you started, it likely qualifies.
How long does the R&D credit study take?
Typically 4-8 weeks from initial information gathering to final forms, integrated with year-end tax preparation. Timeline depends on complexity of activities and documentation availability.
Can I claim both federal and state R&D credits?
Yes. After federal determination, we evaluate state eligibility and prepare state-specific forms. Many states offer additional R&D credits that can significantly increase total tax savings.
What if I get audited?
We prepare audit-ready documentation meeting IRS standards, including contemporaneous records, technical narratives, and business component details. Our comprehensive records support credit claims and demonstrate compliance with Section G requirements.
Do R&D credits carry forward?
Yes. Credits carry backward 1 year and forward up to 20 years, maximizing value even if you can't use them immediately. This means credits never expire and can be used when most beneficial.
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Learn MoreStart Maximizing Your R&D Tax Credits
Let's identify your eligible activities and prepare your federal R&D credit claim