Have you applied for R&D tax credits?


4

Like many software product companies, we spent an exorbitant amount of money in 2008 developing our product. I’ve heard that there are federal R&D tax credits available ("Section 41 Credit"), but our CPA does not specialize in this area, and advised that we hire a consultant who can evaluate whether our activities would qualify.

Have you had any experience in R&D credits for software product development?

Finance Tax

asked Oct 15 '09 at 12:08
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Alex Papadimoulis
5,901 points
  • +1 Great question. We have been going through this as well, and would love to hear how to make this happen. – Vineet 9 years ago
  • +1 from me too... would like to know for USA – Jason 9 years ago
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3 Answers


3

I have filed SR&ED tax credit applications for the past 8+ years. This is a Canadian program; I suspect you are talking about a program in the US?

In Canada one of the best things you can do is go through a pre-qualification process, where you have both a financial and technical consultant come in and evaluate your application. There are many consultants here who specialize in SR&ED apps but I prefer to handle ours directly. My understanding is that most businesses opt to use a consultant, who tend to charge a percentage fee on the annual claim amount.

We've built our own time reporting / project management system to synchronize with SR&ED reporting. It makes it fairly easy to separate standard vs. R&D research at the end of the year and we also aim to do an internal report every quarter.

Sorry that I can't offer any specific advice for companies outside Canada.

answered Oct 15 '09 at 12:32
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Julie King
871 points
  • Great answer! And yes, we are US based.... but I think the same point applies: seek a consultant contingent upon credit amount. – Alex Papadimoulis 9 years ago
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answered Oct 15 '09 at 23:51
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Jason
16,231 points
  • exactly.... ;-) – Ricardo 8 years ago
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0

There are couple of aspects of applying for a tax credit. One is to determine eligibility and consultants are quite handy to help with that. However at the end of the day it is all about non-routine R&D and after a couple of submissions people "get it" and then begins phase two -- how to substantiate and quantify your claim. Many companies end up building some internal tools to do that. Alternative option would be using special software like ours https://www.qntify.co/.

answered Apr 2 '18 at 20:04
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