FEDERAL TAX CREDITs

Reclaim your spending

Did you know that all work done in partnership with Pixoul is eligible for the federal R&D Tax Credit?* You could qualify for a tax credit that directly offsets your spending with us, dollar for dollar.  

*Subject to validation based on your unique project. See our legal notice for more info.

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What is the federal
R&D Tax Credit?

The Research and Development (R&D) Tax Credit is a government-sponsored tax incentive offered to companies who create or improve a product or process in the course of their business. Many businesses are unaware that their daily operations could qualify for a dollar-for-dollar tax credit, irrespective of industry or company size.
-Leyton Group USA, The CPA Journal

IN DEPTH

Applying the Tax Credit to your company

What costs qualify for credit?

There are generally four areas of costs where your company can qualify for credit: wages, subcontractors, raw materials and supplies, and computer costs.

What is the four-part test?

To be eligible for the R&D Tax Credit, the IRS has enforced a four-part test to determine qualified R&D activity. An activity must meet all four parts to be considered a qualifying research activity. As a quick summary, the four parts generally are:

  • Business Component Test: Has the company demonstrated that the information being discovered was to develop a new or improved product?
  • Uncertainty Test: Has the company demonstrated that it tried to learn something new about the product or process being changed?
  • Technology Test: Can the company demonstrate that its development of a business component relied upon the principles of engineering or computer science?
  • Experimentation Test: Has the company demonstrated that it went through a process of elimination, trial and error, or other evaluation of alternatives?

How do we qualify?

Generally speaking, all of our work will qualify for the R&D Tax Credit, with a few exceptions. To qualify as research according to IRC section 41, the taxpayer must show that the activities include:

  • Conducting all R&D activity in the U.S.
  • Developing or designing new and innovative products or processes
  • Improving existing products, processes, or prototypes
  • Reviewing the potential of several alternatives or methods during the development or improvement process

What are next steps?

At your company's discretion, Pixoul will partner with your internal or external accounting teams to ensure your project qualifies for the federal R&D Tax Credit. When applicable, we'll scope and identify which of our services qualify for credit and how much credit you're able to take advantage of.

BOTTOM LINE

What does this mean for my company?

Nearly all of our consultancy projects can qualify for the federal R&D Tax Credit, which means that every dollar you spend with us can directly offset your federal tax liability. To get started, schedule a call with a Pixoul product strategist to discuss your unique needs.

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Dollar-for-dollar tax credits