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The R&D Tax Credit for Startups and the Software Development Industry

It’s not just for large corporations and enterprises… tech startups are highly encouraged to claim for this government benefit.

Hey, all you founders and entrepreneurs! Many software development companies are eligible to claim the R&D Tax Credit for startups due to the inventive nature of the industry. Yet, many miss on out these highly valuable credits due to a lack of awareness.

The U.S. government originally set up the Research & Development Tax Credit to compete with the latest and greatest research and inventions of the world and thus had to invest in developments to do so. With its initial success, Congress renewed the research credit time and time again, finally making it permanent in 2015.

Understanding the qualifying activities and related expenses of the R&D Tax Credit law is the key to yielding an accurate and comprehensive amount of credits for your software company.

Software companies are often viewed as ideal candidates for the R&D Tax Credit because of the nature of their research and activities, with potential qualifying job titles including Director of Software Engineering, Programmer, Software Analyst, Software Developers, and more.

The tax benefits for software companies can provide the necessary cash to hire more employees, expand production facilities, and increase research and development initiatives.

The bulk of your developers’ time most likely qualifies, but first, we’ll cover a few activities that do not qualify per the IRS Form 6765.

Whether you’re sure you qualify or not, now is a great time to contact us to take the next step in claiming your company's credits.

Frequently Asked Questions


Does software qualify for R&D tax credit?

Many software development companies are eligible to claim the R&D Tax Credit for startups due to the inventive nature of the industry.

Is software development considered R&D?

Most software development qualifies for the R&D Tax Credit. Software companies are often viewed as ideal candidates for the R&D Tax Credit because of the nature of their research and activities.

How do I qualify for R&D tax credit?

The IRS has established a four-part test to help determine if your company’s activities could potentially qualify for the tax credit.
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R&DTech
The R&D Tax Credit for Startups and the Software D...

It’s not just for large corporations and enterprises… tech startups are highly e...