Schedule time with one of our tax experts and prepare your R&D Tax Credit in under 30 minutes!
If you’re wondering when you’re going to receive your R&D Tax Credit, the short answer is: it’s all down to when you, or your accountant, filed your income taxes and Form 6765.
As we all know, dealing with the IRS can be… unpredictable–so we’ve created a quick reference on:
When preparing your R&D Tax Credit, you can prepare your own, have your accountant manually prepare it for you, or use a third-party service. Regardless of the preparation method, there are key steps you need to follow to file and receive your credit.
After you have prepared your R&D Tax Credit, you or your accountant need to file Form 6765, along with your Federal Income Tax Return.
The R&D credit is based on the qualified research expenses incurred during the tax year and is on the business income tax return for the company claiming the credit.
There is a section at the bottom of Form 6765 to allow qualified small businesses to apply all the credit to payroll taxes instead.
Note: Don’t want to apply all of your credit? You can also apply other amounts up to a maximum of $250,000.
If you make the election to take the payroll credit, then you must file Form 8974 with your quarterly tax return. Hand this form off to your payroll provider, and they will incorporate the credit into your payroll tax return.
The credit is first applied against employer payroll taxes quarterly, beginning in the first calendar quarter after you file your federal income tax return.
However, the exact timing and method of tax savings depend on your payroll provider and R&D credit preparer--if you’re working with a credit preparer.
Note: Some R&D Credit preparation companies offer a loan advance to get your credit amount right away instead of waiting. There are some cons to opting for this type of service, like:
Because Form 6765 needs to be filed with your income tax return, timing is everything when getting your R&D tax credit as soon as possible. Trust us, we understand wanting to reduce your burn–so keep in mind these dates:
End of Quarter Deadlines:
Extension Filing Deadline:
Payroll Providers Turnaround:
*Gusto is currently the only provider that offers real-time refunds for an additional cost.
This is a hard question to answer and, unfortunately, the most honest answer is:
As we said, it’s a hard question to answer.
This is why all the above dates and turnaround times are so important.
It’s all a domino effect.
By meeting the income tax return filing deadline–be that on April 15 or by the end of each subsequent quarter–you can then have your payroll tax provider process your payroll tax credits, which helps get everything over to the IRS quick, fast, and in a hurry.
The best way to calculate when you'll see your tax credit is:
The date that you land on could serve as a good approximation for when you can expect your credit.
This depends on your payroll provider.
Note: check with your payroll provider to confirm how the R&D tax credit will be refunded.
However, we can give you a general overview of the process:
Note: even after you submit the credit information to your payroll provider, it's important to remember that most providers will continue to withhold and make deposits of your regular employer's payroll taxes each pay period.
If you use a PEO, a professional employer organization–where your employees are “employees of record” for the payroll company–the process is similar, except that the PEO will receive and reconcile the credit across all their client companies first and then they will then credit your account.
Note: what's the fastest way to enjoy your tax savings? Do not submit the employer payroll until you know the credit amount. That way, you don’t have to wait for a refund check from the IRS.
Currently, Gusto is the only payroll provider that allows this option. However, Gusto charges you $100 a month extra for this service, coined the “Real-Time Refund.”
Last, but certainly not least, payroll!
Here’s a guide to filing payroll tax credits with the following payroll providers. Just click a menu item to view the steps for your provider:
Want to learn more about all things R&D? Check out some of our related articles and don't forget to sign up for our newsletter to keep up with Neo.Tax!