Claim R&D Tax Credits for Your
Software Development Research

Refunds are available for companies performing research within the Software Development Industry. The research credit provides dollar-for-dollar cash savings each year for businesses engaged in developing new or improved products and processes. These funds can help hire additional staff, expand R&D efforts, improve software solutions, and support overall growth initiatives.

Examples of Qualifying Software Development R&D Work

Many software development companies are unaware that their routine design and development work can generate significant research credits. Below are examples of qualifying activities and potentially eligible job roles.

Alpha and beta testing of software applications

Designing and testing applications or platforms

Coding, programming, and functional, integration, or user interface testing

Development activities in cloud computing environments

Creating new architectures, algorithms, or database management techniques

Software and hardware development to enhance communication and interaction

Designing specialized technologies such as image processing, artificial intelligence, or speech recognition

System software development including operating systems and compilers

Alternative Minimum Tax (AMT) Offset

For tax years beginning after December 31, 2015, eligible small businesses (with $50 million or less in gross receipts) may claim the research credit against AMT liability.

Eligible Job Roles for R&D Credit

Director of Software Engineering

Programmer

Senior Technical Leads

Software Analyst

Software Developers

Software Integration Engineers

Up to $500,000 in Payroll Tax

Qualified start-ups may apply up to $500,000 of the research credit against payroll taxes. Recent Treasury regulations clarify that internal use software (IUS), defined as software used for general and administrative purposes, may also qualify, allowing additional software developers to be included in R&D credit incentives.

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