R&D Tax Credits for Software Development
![Software Programmer](https://static.wixstatic.com/media/11062b_362f98527474464881f5733c726632ec~mv2.jpeg/v1/fill/w_90,h_60,al_c,q_80,usm_0.66_1.00_0.01,blur_2,enc_auto/11062b_362f98527474464881f5733c726632ec~mv2.jpeg)
What is the R&D Tax Credit for Software Development?
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The R&D tax credit for Software Development is a unique tax incentive that benefits businesses that develop or improve upon products, processes, or services. The R&D tax credit reduces your federal tax liability dollar-for-dollar and allows businesses an immediate source of liquid assets to get projects off to an immediate start. Businesses are also able to claim the R&D tax credits retroactively for up to 3 or 4 years for work that has already been completed.
Many software development businesses may be eligible for the R&D tax credits and not even realize it. Does your software development business qualify for the R&D tax credit? The IRS has 4 guidelines in place to help businesses understand if they may qualify:
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![Young Scientist](https://static.wixstatic.com/media/11062b_8211195b7d69485f94512b9137b8c038~mv2.jpg/v1/fill/w_61,h_41,al_c,q_80,usm_0.66_1.00_0.01,blur_2,enc_auto/11062b_8211195b7d69485f94512b9137b8c038~mv2.jpg)
1. Does your business develop or improve upon products, businesses, or services?
![Meeting Table](https://static.wixstatic.com/media/11062b_5876986ba1ca4b6a80dabe4657c9414f~mv2.jpg/v1/fill/w_61,h_41,al_c,q_80,usm_0.66_1.00_0.01,blur_2,enc_auto/11062b_5876986ba1ca4b6a80dabe4657c9414f~mv2.jpg)
2. Does your business systematically evaluate one or more alternatives during the process of experimentation?
![Fixing a Computer](https://static.wixstatic.com/media/9db3bf855b144c6083ab48c9688c73d9.jpg/v1/fill/w_61,h_46,al_c,q_80,usm_0.66_1.00_0.01,blur_2,enc_auto/9db3bf855b144c6083ab48c9688c73d9.jpg)
3. Does your business attempt to solve a technical uncertainty?
![Science](https://static.wixstatic.com/media/db6e66c11cf24c1aa7aa0b93a17bbb2f.jpg/v1/fill/w_61,h_41,al_c,q_80,usm_0.66_1.00_0.01,blur_2,enc_auto/db6e66c11cf24c1aa7aa0b93a17bbb2f.jpg)
4. Does your business fundamentally rely upon established principles of science?
If you answered yes to these 4 questions, your software development business may be eligible to claim these beneficial R&D tax credits. Proveres is here to help you figure out the details.
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What can the R&D Tax Credits do for Software Development businesses?
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Reduce your payroll taxes
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Use as non-dilutive funding
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Carry your credit forward
How It Works
Proveres will work closely with your business to gain maximum tax credits each year by following these 5 steps:
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Identify & Discover
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​Proveres provides a full analysis of your business and operations, and will help identify which projects and work your business does that can be claimed towards the R&D tax credit.
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Quantify​
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Proveres reviews expense-related data from your business and identifies what will qualify for the R&D tax credit.
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Qualify​
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Proveres gathers relevant information and documentation into the qualifications for each R&D tax credit claim.
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Validate & Support​
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When the credits to be claimed have been calculated and validated, Proveres assists your business to facilitate a smooth tax filing process.
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Annual Reviews to Maximize Credits​
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In addition to discovering existing R&D tax credits your Software Development business qualifies for, Proveres also helps your business identify and implement procedural changes to unlock future R&D tax credits.
Some examples include, but are not limited to Research, Development, Design, Experimentation, or Testing of any of the following categories:
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Cybersecurity
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Cryptocurrency & Blockchain
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Electronics & Robotics
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Telecommunications
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SaaS
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Mobile application development
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Video Game Development
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AR/VR Development
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Artificial Intelligence
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FinTech (Financial Technology)
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Developing source code
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Integrating and customizing third-party applications
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UI/UX
Additionally, if you have employees or 3rd-party contractors with the following job titles, you may qualify for R&D tax credits:
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Software Developer / Software Engineer
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Back-end / Full-Stack Developers
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UI/UX Engineers
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C-Suite
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Data Scientist
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Product Manager
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QA/QC Employees
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Research Analyst
To learn more about the R&D Tax Credit for Software Development, and whether your business qualifies, please contact us
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