Federal Research and Development (R&D) Tax Credit

Qualified small businesses may be eligible to claim a federal tax credit for costs related to their research and development activities, up to $250,000 per fiscal year. 

This credit is taken against your Social Security taxes, so your refund will be capped by the amount of Social Security taxes you owe. Your actual refund may be less than your total eligible credit, but don’t worry, you won’t lose the credit - you can carry it over into future years. 

Important: Tax credit calculations can be very complicated—if set up incorrectly it may cause tax payment and filing issues down the road. To help make sure this is done accurately, we ask for our customers to have accountant or expert support. 

Claim the R&D tax credit with Gusto

With Gusto, there are two ways to claim the credit—both require that an accountant set you up to do so (accountants can refer to the steps below in the "Set up a client to claim the Federal R&D Tax Credit" section). If you don’t have an accountant, you can work with Ardius (a Gusto company) to help claim the credit that has been set up in Gusto. Gusto integrates with Ardius to streamline company qualification for their eligible R&D tax credits by syncing employee wage data to Ardius. 

Note: While the IRS does support the R&D Credit retroactively, this isn't something Gusto or Ardius supports at this time. If you need to apply the R&D Credit to a closed quarter, you'll need to complete this outside of Gusto.