A federal and state credit for work you’re likely already doing, developing and improving products, processes, software, and techniques. We qualify it, document it, and put it to work against your income tax or your payroll taxes.
Request a Complimentary AssessmentThe R&D credit (IRC §41) rewards U.S. companies for developing or improving products, processes, software, formulas, or techniques. It was made permanent in 2015 and is one of the most valuable incentives in the code, because it’s a credit, not a deduction, it reduces tax dollar-for-dollar. If your team designs, engineers, tests, or iterates to solve technical problems, a portion of those wages, supplies, and contractor costs likely qualifies, whether or not anyone has ever called it “research.”
Qualifying activity shows up across far more industries than most owners expect.
New platforms, architecture, algorithms, integrations, and performance work.
New products, tooling, automation, and process and quality improvement.
Design alternatives, modeling, structural and systems problem-solving.
Formulation, shelf-life and process development, and production scale-up.
Crop, equipment, and process innovation and production improvement.
Device, formulation, testing, and technical development work.
The same credit can be applied two different ways, depending on where your business is in its life.
For profitable companies, the credit offsets federal income tax dollar-for-dollar. Anything you can’t use this year carries back one year and forward up to twenty, and eligible small businesses can offset AMT.
Explore the income tax credit →For qualified small businesses, up to $500,000 a year can offset employer payroll taxes instead, real cash even before you’re profitable. We coordinate it directly with your payroll provider so it actually reaches your bank account.
Explore the payroll tax credit →Every project we claim is measured against the four-part test of §41(d). All four must be met.
The work aims to create a new or improved business component, its function, performance, reliability, or quality.
It fundamentally relies on the hard sciences, engineering, computer science, physics, chemistry, or biology.
At the outset it was uncertain whether, or how, the objective could be achieved, or what the appropriate design was.
That uncertainty was resolved through testing, modeling, simulation, trial and error, or evaluating alternatives.
Enter your rough R&D spend for a ballpark federal credit. It’s an estimate, not a quote — your actual credit is determined by the study.
Estimate only. This tool uses the Alternative Simplified Credit method with simplifying assumptions; your actual credit depends on your facts and is determined through the R&D study. Not a quote or a guarantee.
Knowing the exclusions is how a claim survives scrutiny. We draw these lines up front.
Around 38 states offer their own R&D credits, each with its own rules, some refundable, some transferable or sellable. Where your research happens in a state with a program, we analyze and claim it alongside the federal credit, so nothing is left on the table.
We don’t reconstruct your year in April. We capture qualifying work as it happens and hand your CPA a filing-ready package, fixed fee, never a percentage of your credit.
Yes. Open tax years, generally the last three, can typically be captured by amending, subject to each year’s statute of limitations. We assess whether a lookback is worth it before you commit.
No. The test is technical, not academic. Software teams, manufacturers, engineers, and food and ag companies routinely qualify for everyday development and improvement work.
Failure often helps. A process of experimentation, including approaches that didn’t work, is exactly what the credit rewards. Success isn’t required.
Never. We charge a flat fee based on the work, not a cut of your savings. You earned the credit; it stays yours.
Yes. We run the study and hand your CPA a filing-ready package. Your tax relationship stays exactly where it is.
This page is general information, not tax or legal advice. Eligibility and amounts depend on the taxpayer’s facts and applicable law, and are determined through the appropriate R&D study. Novaric does not guarantee eligibility, credit amounts, or any IRS outcome.