Federal Research and Development (R&D) Tax Credit

The Federal Research and Development (R&D) Tax Credit is a tax credit that rewards U.S.-based companies to invest in technological innovation. Businesses with qualified R&D activities may be eligible to claim a federal income tax credit for costs related to their R&D. 

A Qualified small business (QSB) (less than five years of gross revenue and less than $5,000,000 in gross revenue within the tax year) may be eligible to use up to $500,000 in R&D tax credits per year to pay the company portion of payroll taxes (Social Security and Medicare tax). Gross revenue consists of what you receive from sales, any interest, rents, royalties, dividends or other income you received. 

If you're a Gusto customer interested in R&D tax credits, we'll use the company info you’ve already provided to make the R&D tax credit process easier.

View our blog entry for additional information on how to identify and claim your R&D tax credits.