How to Claim Your R&D Tax Credit
To claim the R&D tax credit, businesses file IRS Form 6765 with their federal return. The process involves four steps: identify qualifying activities, calculate qualified research expenses, choose a calculation method (Regular or ASC), and maintain documentation. First, confirm your business meets the eligibility requirements. Don't forget to stack state credits on top of the federal benefit. Strike handles the entire process for you.
$
300
m+
Credits Delivered
for 1,100+ clients
3
Year Lookback
for amended returns
20
Year Carryforward
for unused credits
100
%
Audit Defense
on every engagement
How to Claim R&D Tax Credits in Four Steps
Foundation of your claim
Document Qualified Research Activities
Identify every project where your team attempted to resolve technical uncertainty through a process of experimentation. Document the technical challenge, the alternatives evaluated, and the outcome. Each project must satisfy the IRS four-part test: permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation.
Wages, supplies, contracts, cloud
Identify and Calculate Qualified Research Expenses
For each qualifying project, compile four categories of expenses: W-2 wages for employees who performed, supervised, or directly supported the research; supplies and materials consumed during experimentation; 65% of payments to U.S.-based third-party contractors; and cloud computing costs directly tied to qualified research.
Two calculation methods
Compute the Credit Using IRS Form 6765
Complete IRS Form 6765 using either the Regular Credit method (20% of QREs above a fixed base amount) or the Alternative Simplified Credit method (14% of QREs exceeding 50% of the average QREs from the prior three tax years). Most companies use the ASC method because it requires less historical data and typically produces a larger credit.
Original or amended returns
File With Your Federal Tax Return
Attach Form 6765 to your federal income tax return (Form 1120 for corporations, Form 1065 for partnerships, Form 1040 for individuals). For prior tax years, file an amended return (Form 1120-X or 1040-X) within the statute of limitations, generally three years from the original filing date.
IRS Form 6765
What Is IRS Form 6765 and How Do You Complete It?
Form 6765, Credit for Increasing Research Activities, is the IRS form used to calculate and claim the R&D tax credit. It has four sections that must be completed accurately. The IRS provides complete instructions in IRS Form 6765 and the Form 6765 instructions (PDF).
Section A:
Regular Credit
Calculates the credit as 20% of qualified research expenses exceeding a base amount derived from your historical ratio of QREs to gross receipts. Requires tax return data going back to 1984 for established companies.
Section B:
Alternative Simplified Credit
Calculates the credit as 14% of QREs exceeding 50% of the average QREs from the prior three tax years. Simpler to compute and the preferred method for most businesses. If you have no QREs in the prior three years, the rate drops to 6%.
Section C:
Additional Information
Requires details about your business, controlled group status, and the types of research activities performed. Includes reporting on business component identification and the nature of your qualified research.
Section D:
Payroll Tax Election
For qualified small businesses (gross receipts under $5 million, in business less than 5 years) to elect to apply up to $500,000 of the credit against payroll taxes instead of income taxes. Filed with Form 8974.
What You Need
What Documentation Does the IRS Require?
The IRS requires contemporaneous documentation to substantiate your R&D tax credit claim. Strong documentation is the difference between a successful claim and a denied one. Strike Tax Advisory handles all documentation gathering and organization as part of every engagement.
A recent Tax Court case shows why documentation matters: Phoenix Design ruling puts R&D credits at risk.
Project Descriptions
Detailed records of each qualifying project: the technical challenge, the approach taken, the alternatives evaluated, and the resolution. Include project start and end dates, team members involved, and their roles.
Employee Time Records
Records showing how much time each employee spent on qualifying R&D activities. This can include timesheets, project management data (Jira, Asana, GitHub commits), calendars, or employee surveys and interviews.
Financial Records
Payroll records, general ledger entries, accounts payable records, and contractor invoices. These substantiate the dollar amounts claimed as qualified research expenses.
Technical Documentation
Design documents, architecture diagrams, test plans, test results, prototypes, lab notebooks, engineering change orders, source code repositories, and pull request histories.
Communications
Emails, Slack messages, meeting notes, and internal memos that demonstrate the technical discussions, design decisions, and experimentation processes related to qualifying projects.
Recover Past Credits
How Far Back Can You Claim R&D Tax Credits?
The IRS allows businesses to claim R&D tax credits retroactively by filing amended federal tax returns for open tax years. The statute of limitations is generally three years from the original filing date or two years from the date the tax was paid, whichever is later.
For example, a calendar-year C-Corporation that filed its 2022 return on April 15, 2023 has until April 15, 2026 to amend and claim credits for 2022.
With the passage of the One Big Beautiful Bill Act (OBBBA), companies that stopped claiming R&D credits during 2022, 2023, and 2024 due to IRC Section 174 amortization requirements can now amend those returns and recover credits they missed. This is a time-sensitive opportunity with deadlines already arriving. Companies that skipped credits in 2022-2024 can now recover them under OBBBA. Read: Did you skip R&D tax credits in 2022-2024?
Don't forget to claim state credits too. See which states offer R&D credits in our federal vs state comparison.
- 2022 S-Corp/Partnership returns: deadline was March 15, 2026
- 2022 C-Corp returns: deadline is April 15, 2026
- 2022 Individual returns: deadline is April 15, 2026
- 2023 and 2024 returns: deadlines extend into 2027 and 2028
Time Sensitive
OBBBA Recovery Window
The OBBBA retroactively restored immediate R&D expensing for 2022-2024. If your company reduced or skipped R&D credit claims during those years, you may be owed significant refunds. Filing deadlines are arriving now.
Carryforward
20-Year Credit Carryforward
Unused R&D credits carry forward for up to 20 years under IRC Section 39. If your credit exceeds your current tax liability, the excess is not lost. It remains available to offset future taxes.
Credit Calculation
How Is the R&D Tax Credit Calculated?
There are two methods for calculating the federal R&D tax credit. Most companies use the Alternative Simplified Credit because it requires less historical data and often produces a larger credit.
For a broader understanding of the credit, see our R&D Tax Credit overview. For multi-entity structures, see our guide: R&D credits for controlled groups.
Method 1
Regular Credit
Rate
20% of QREs above base amount
Base Calculation
Fixed-base percentage x average annual gross receipts for prior 4 years
Data Needed
QRE and gross receipts data back to 1984
Best For
Established companies with consistent R&D history
Credit Range
Varies widely based on historical ratios
Method 2
Simplified Credit
Most Used
Rate
14% of QREs above 50% of 3-year average QREs
Base Calculation
50% of average QREs from prior 3 tax years
Data Needed
Only 3 years of prior QRE data
Best For
Most companies, especially those new to R&D credits
Credit Range
Typically 6-10% of current-year QREs
Strike calculates credits using both methods and applies whichever produces the larger benefit for your company. There is no additional charge for this analysis.
Real Results
R&D Tax Credits We Have Delivered
$
3.7
m
Robotics Firm
35 employees. 70% of wages and 90% of expenses qualified. Custom robotics design, production, and integration.
$
668
k
Cybersecurity Company
SaaS firm with patent-pending encryption development. Qualified for federal and state credits.
$
657
k
Automotive Manufacturer
30 employees. Custom racing engine design and manufacturing innovation qualified at 62% of wages.
Why Strike
Why Choose Strike Tax Advisory?
$300M+ in Credits Delivered
For more than 1,100 clients across software, manufacturing, aerospace, engineering, food and beverage, agriculture, and dozens of other industries.
Zero Upfront Fees
Strike works on 100% contingency. You pay nothing unless we successfully identify and deliver R&D tax credits.
Free Unlimited Audit Defense
Every engagement includes Strike Shield audit protection. If the IRS reviews your claim, we defend it at no additional cost.
No Obligation
Free 15-Minute Assessment
We can usually tell you within 15 to 30 minutes whether your company has a meaningful R&D credit opportunity and give you a rough estimate of the potential savings.
No cost. No obligation. No pressure.
Quick Estimate
Estimate Your R&D Tax Credit
Use our free calculator to get a quick estimate of how much your company could save.
R&D Tax Credit Claiming: Frequently Asked Questions
Form 6765, Credit for Increasing Research Activities, is the federal tax form used to calculate and claim the R&D tax credit. It is attached to your federal income tax return (Form 1120, 1065, or 1040).
The ASC calculates the R&D credit as 14% of your qualified research expenses exceeding 50% of your average QREs from the prior three tax years. It is simpler than the Regular Credit method and the preferred approach for most businesses.
You can generally amend federal tax returns for up to three years from the original filing date. For example, a 2022 return filed on April 15, 2023 can be amended through April 15, 2026.
The IRS requires records that connect your projects, people, expenses, and technical uncertainty. This includes project descriptions, employee time records, payroll data, contractor invoices, technical documents, test results, and communications showing experimentation.
Yes. You can file an amended federal return (Form 1120-X for corporations, Form 1040-X for individuals) to claim R&D credits for any open tax year within the statute of limitations.
A typical Strike engagement takes 4 to 8 weeks from kickoff to credit delivery. The timeline depends on the complexity of your R&D activities and the availability of documentation.
Strike provides free unlimited audit defense on every engagement. If the IRS reviews your claim, our team handles all correspondence, provides substantiation documentation, and defends every dollar of the credit.
Ready to Claim Your R&D Tax Credits?
Strike Tax Advisory handles the entire process from documentation gathering through credit delivery. Zero upfront fees. Free unlimited audit defense.