Developing a product, process, or software system does not automatically create an R&D credit. Tavella CPA Group reviews the actual business components, research locations in the United States or a U.S. territory, technical uncertainty, people, contractors, and costs; prepares Form 6765 when supported; coordinates eligible startup payroll-credit elections; and separately addresses Section 174A. Eligibility, usable credit, and IRS acceptance depend on the facts and records, and no outcome is guaranteed.
Form 8974 and employment-tax-return coordination when included
Domestic Section 174A deduction or amortization review
Prior-year unamortized research-expense and method-change review when separately accepted
Business-component documentation for original or amended-return claims
Controlled-group, common-control, pass-through, and owner-return coordination
IRS examination or claim-support work under a separate written scope
BEFORE YOU REQUEST A CALL
See what fits this service and what is scoped separately
This service may be a fit when
Your business developed or improved a product, process, software, technique, formula, or invention through research in the United States or a U.S. territory
The work involved technical uncertainty and evaluating one or more alternatives
You can identify the projects, employees or contractors, activities, dates, and related costs
You want Form 6765 and the connected income-tax or payroll-tax filings coordinated
You understand that ordinary product development or engineering work does not automatically qualify
These items require separate scope or another professional
Each federal or state return, amended return, partnership AAR, payroll filing, and owner return
State research credits, incentive applications, and jurisdiction-specific substantiation
Section 174 or 174A accounting-method changes and recovery of prior unamortized amounts
IRS notices, refund-claim review, examination support, appeals, and representation
Legal opinions, intellectual-property advice, government grants, cost-segregation studies, and engineering certifications
Build the claim from projects, people, costs, and contemporaneous records
The review begins with the entity and ownership structure, gross-receipts history, research locations, products or processes being developed, technical uncertainties, alternatives tested, employee roles, payroll records, supplies, contractor agreements, prior Forms 6765, and Section 174 or 174A schedules. Each business component and expense category is evaluated separately. Sensitive project, payroll, and tax records are requested only through the secure portal after the engagement is accepted.
COMMON QUESTIONS
Questions about research and development tax credit review and filing support
What is the federal four-part test for the R&D tax credit?
Qualified research generally must satisfy the statutory requirements for a permitted business purpose, technological information, elimination of uncertainty, and a process of experimentation. The test is applied separately to each business component. Exclusions can apply to research after commercial production, adaptation, duplication, surveys or studies, certain internal-use software, foreign research, funded research, and other activities.
Can a startup use the research credit against payroll taxes?
Potentially. A qualified small business generally must have less than $5 million of gross receipts for the credit year and no gross receipts before the five-tax-year period ending with that year, with aggregation and predecessor rules applied. The election is made on a timely original income-tax return using Form 6765, and the elected credit is then coordinated through Form 8974 and the applicable employment-tax return. The annual election is limited by the credit, the elected amount, and the statutory cap.
Is every software-development project eligible?
No. Software work must satisfy the research-credit requirements based on the actual uncertainty, technological basis, experimentation, and intended improvement. Internal-use software can face additional requirements. Routine configuration, maintenance, data conversion, customer-specific adaptation, and work performed after commercial production may not qualify.
Is Section 174A the same as the R&D tax credit?
No. Section 174A addresses the tax treatment of domestic research and experimental expenditures for tax years beginning after 2024, while Section 41 determines the credit for qualified research activities and expenses. A cost can require research-expense analysis without generating a research credit. Revenue Procedure 2025-28 used the Section 448(c) small-business and non-tax-shelter tests for its special retroactive procedure; that is different from the qualified-small-business test for the research-credit payroll election. Its amended-return or AAR deadline was the earlier of July 6, 2026 or the applicable Section 6511 refund-claim deadline, so remaining transition questions require a current, fact-specific review.
What records support an R&D tax-credit position?
Useful records can include project and business-component lists, technical uncertainty descriptions, alternatives tested, dated design and test records, employee roles and time support, payroll data, supply invoices, contractor agreements, gross-receipts history, prior Forms 6765, and Section 174 schedules. A study created after year-end does not replace reliable records showing what occurred during the year.
PLAIN-ENGLISH TAX GUIDES
Learn what to gather and what to ask next
Use these source-backed guides to prepare for a conversation about this service. The guides provide general information, not advice for a specific situation.
Learn the qualified-small-business rules, timely Form 6765 election, Form 8974 process, payroll coordination, and documentation for the R&D payroll tax credit.
Understand current domestic R&E deductions, optional amortization, foreign research treatment, 2022–2024 transition rules, and the connection to Form 6765.
Catch up overdue bookkeeping, reconcile accounts, correct recordkeeping issues, and prepare reliable business records for tax filing. Scope and pricing are confirmed first.
