R&D TAX CREDITS
Unlock Your Startup’s R&D Tax Credit Potential with Kruze Consulting
Is your startup missing out on substantial tax savings?
The R&D tax credit is a federal credit that lets qualifying startups offset up to $500,000 in payroll taxes each year, for up to five years, even before they turn a profit. Many VC-backed companies do not realize they qualify for R&D tax credits, leaving real money on the table.
Kruze Consulting specializes in helping startups document and claim the R&D tax credit, so you maximize your benefit while staying compliant with IRS requirements. Our team handles the entire process, from qualification assessment to documentation and filing, so you can focus on innovation while we improve your tax position. The credit works hand in hand with your broader startup tax services and startup accounting.
Do You Qualify? A Quick Self-Check
Your startup can likely claim the R&D payroll tax credit if all three are true:
- Under $5 million in gross receipts for the current tax year.
- No gross receipts before the five-year window ending with the credit year. In plain terms, your first revenue was within roughly the last five years.
- You perform qualifying research that passes the IRS four-part test below.
Not sure where you land? Talk to an expert and we will confirm your eligibility.
Does Your Research Qualify? The IRS Four-Part Test
Not all research expenses qualify. You should work with an experienced CPA firm like Kruze to review your research and development expenses and confirm they qualify for the R&D tax credit.
Your expenses need to meet four requirements:
Qualified purpose
The research is focused on a specific, defined objective.
Eliminates technical uncertainty
You are working to advance the science of your process or project.
Uses experimentation
You rely on the scientific method or a trial and error process.
Technical in nature
Your project is grounded in hard science like biology or engineering. Computer science can qualify in many cases.
What Expenses Count Toward the Credit?
The most common qualifying research expenses for startups are:
Employee wages Pay for staff who perform or directly support your R&D work.
Contractor costs Up to 65% of what you pay U.S.-based contractors for qualifying research.
Cloud computing and hosting Server and cloud costs used to develop or test your product.
Supplies Materials used up in the research process.
Contact Us for a Free Consultation
Kruze Consulting specializes in startup accounting, relying on experienced accounting, tax, and finance professionals, using best-in-breed financial tools and systems.
Benefits of Kruze’s R&D Tax Credit Service
Immediate Cash Flow Boost
Offset up to $500,000 in payroll taxes per year, extending your runway and funding growth.
Expertise in R&D Accounting
Our deep understanding of VC-backed startups means accurate R&D expense documentation and a maximized credit.
Audit-Ready Documentation
We provide complete, IRS-compliant documentation that supports your claim and protects you during an audit.
Our R&D Tax Credit Services
We run the full process so you do not have to.
Qualification Assessment
We evaluate your activities against the IRS four-part test and confirm you meet the qualified small business gross-receipts rules, so you know you are eligible before any work begins.
Credit Calculation
We calculate your maximum allowable credit using the method that benefits you most. Our R&D tax calculator takes you through this), we calculate your maximum allowable credit.
Documentation and Form 6765
We prepare all required forms, including Form 6765, and build them into your tax return. For broader filing support, see our startup tax returns page.
Payroll Offset
We file Form 8974 with your quarterly Form 941 so the credit reduces your payroll taxes starting the quarter after you file.
Case Study
Cinder Technologies
Cinder Technologies partnered with Kruze Consulting to claim significant R&D tax credits, resulting in substantial savings for their growing startup.
"Working with Kruze to claim the R&D tax credit has been extremely valuable. In 2022 we were able to claim almost $60,000 in tax credits, and in 2023 we claimed over $100,000."
"I can email my account manager with questions, and if necessary, she will refer me to specialists on the tax team or the R&D tax credit team. I really appreciate that level of service."
Frequently Asked Questions
What activities qualify for R&D tax credits?
Qualifying activities include developing new products, enhancing existing products or processes, and improving prototypes and software.
How much can my startup save with R&D tax credits?
Startups can offset up to $500,000 in payroll taxes annually for up to five years.
Do I need to be profitable to claim R&D tax credits?
No, even unprofitable startups can benefit by using the credit to offset payroll taxes.
How does Kruze Consulting ensure compliance with new IRS requirements?
We stay updated on IRS rules and provide comprehensive documentation to meet the IRS’s stringent requirements, protecting your claim from rejection.
Contact Us for a Free Consultation
Kruze Consulting specializes in startup accounting, relying on experienced accounting, tax, and finance professionals, using best-in-breed financial tools and systems.
Current Blogs on R&D Tax Credits
Discover insights, strategies, and expert updates to help startups maximize savings and fully leverage R&D tax credits.
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