When making a claim for R&D tax credits, companies can generally claim for the current tax year, plus 3 previous tax years. There is also a R&D tax credit carry-forward period of up to 20 years. It’s important to remember that the claims process can change a bit. This depends on your company’s industry and its qualifying research activities.
How Are R&D Tax Credits Calculated?
R&D tax credits are figured by looking at this year’s R&D expenses. They compare these expenses to a historical “base” period, usually the last three years.
The credit is calculated by comparing the spending in the current tax year to spending from previous years. The most common method is the Alternative Simplified Credit Method. It takes the current year’s R&D spending. Then, it subtracts the average of the last three years. This result is divided by 2. Finally, it is multiplied by a factor of 14%.
These credits are filed and reported on annual tax returns. The deadlines match the statute of limitations. This allows for a look-back period of three years for open returns.
If a taxpayer cannot use all of a credit in a given year, the credit can go back one year. It can also be used for up to twenty years in the future.
The R&D Tax Credit Claim Process
There are three main steps involved in the R&D claim process:
Step 1: Feasibility Study
We deploy a team of R&D tax credit experts to work on your file and monitor the program and funding options. Our specialists conduct a comprehensive review to identify all eligible projects, research activities, and innovation endeavors to determine the viability of credit.
Step 2: Analysis and Claim Optimization
We analyze the information from our assessment. Then, we create a strategy to improve your claim. This helps you get the most federal and state credits.
We also prepare the technical write-ups and necessary financial documentation to support your claim. This includes helping you set up a system for R&D documentation. This will make sure your research records are always current.
Step 3: Form Preparation and Claim Submission
We will finalize your R&D Tax Credit Summary report. This includes preparing federal and state Pro Forma forms for you.
Partner with a trusted R&D tax consultant
At Ayming, we see tax credits not just as an incentive but as a strategic advantage. Our R&D tax consultants have many years of experience. We have a 95% client retention rate. We focus on building long-term partnerships. They make the process efficient, accurate, and valuable from day one.
Don’t leave money on the table. Let our specialists assess your potential and show you what’s possible.
Our strength in numbers
Billion secured for our clients over the past 5 years globally
Million secured in tax credits for our USA clients in the past year
Success rate on all claims submitted
Innovation
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R&D Tax Credit
Our R&D tax credit experts work with businesses in the US. We help them claim the tax benefits they deserve easily.
Section 174A
A limited-time opportunity for small businesses to amend past returns and claim potentially large refunds.
Rapid Claims
Ayming's streamlined process for completing R&D tax claims in just five days.
