Does Your SaaS Company Qualify for the R&D Tax Credit?

A situation to discuss

Investigating alternative architectures or resolving technical performance uncertainty may prompt a review. Routine work, standard implementation and a successful outcome alone do not demonstrate qualification. The specific activities, contracts and expense records matter.

Questions for a specialist

• Which business component and uncertainty are being assessed?
• What alternatives were tested, and how are results documented?
• Who bore the financial risk and retained substantial rights?
• Which costs are supportable qualified expenses?

• Understand the activity tests
• Documentation checklist
• Find your next questions

Software-specific considerations

Routine configuration, implementing standard software and commercial success do not establish qualification. Internal-use and dual-function software can involve additional rules. Ask your adviser how the IRS software provisions apply to the work you actually performed.

Research deductions and the credit are different

The IRS’s Form 6765 instructions discuss Section 174A for domestic research expenditures as well as the research credit. Deduction treatment does not automatically establish credit qualification. Ask about the relevant tax year, elections and coordination with your return.

What this website does not assume

We do not assume that most SaaS companies qualify, that a fixed share of payroll is qualified research, or that a provider guarantees a specific credit. Compare written scope, fees, documentation and support directly.

Explore the limited federal credit illustration, or use the Business Tax Savings Finder.

Sources and verification

Read the source. Confirm how it applies to your tax year and circumstances before acting.