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The Payroll Tax Credit is an extension of the R&D Tax Credit that allows qualified small businesses (QSBs) to use their federal R&D tax credits to offset their payroll. Learn more about the Payroll Tax Credit here.
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The Payroll Tax Credit is an extension of the R&D Tax Credit that allows qualified small businesses (QSBs) to use their federal R&D tax credits to offset their payroll. Learn more about the Payroll Tax Credit here.
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Discover how much you can claim in R&D tax credits for expenditures on the development of new software, technology, products and processes. Calculate how much you’re owed.
Learn more about Federal Credits and recover up to 10% of your R&D spend from the IRS. Qualified small businesses can offset payroll taxes up to $250,000 per year.
Does your state offer R&D tax credits? Depending on the state where the R&D activities are performed, companies can offset various tax liabilities. Learn more about the R&D Tax Credits specific to your state.
The Payroll Tax Credit is an extension of the R&D Tax Credit that allows qualified small businesses (QSBs) to use their federal R&D tax credits to offset their payroll. Learn more about the Payroll Tax Credit here.
Due to the revisions made to Internal Revenue Code Section 174 under the TCJA, R&D expenditures are no longer deductible beginning in the 2022 tax year. Learn how Section 174 impacts your business.
Most companies don't believe they qualify for specialty business tax credits. Our Experts are here to demystify these credits. Check our frequently asked questions about R&D tax credits.
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HomeIndustriesSoftware & TechnologyFinTech

FinTech R&D Tax Credits

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Examples of qualifying activities in FinTech production

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What qualifies as R&D in FinTech Farming?

To qualify, activities must:
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Qualified Research Expenses (QREs)

The IRS allows several categories of Qualified Research Expenses (QREs):

Expense Type
Examples in Row Crops
Eligibility Notes
Wages
Agronomists, farm managers, trial coordinators
Direct, supervisory, and support roles qualify
Supplies
Seed, fertilizer, prototypes, field sensors
Must be consumed in the research process
Software / Cloud
Data analysis tools, yield mapping platforms
Eligible if used for qualified research
Contract Research
University or lab field trials
65% of eligible costs may be claimed
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Roles commonly involved in qualifying activities

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What does not qualify

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Compliance and Documentation

§174 Update

Following the One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, §174 now allows immediate expensing of domestic research expenses for tax years beginning on or after January 1, 2025. Taxpayers may also elect optional amortization under new §174A. Foreign research expenses must still be amortized over 15 years. This is separate from the §41 credit but impacts overall tax planning.

Documentation requirements remain unchanged. Maintain clear records of:

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Frequently Asked Questions

Do aerospace companies qualify for the R&D credit?
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Yes — companies building new aircraft, improving systems, or running aerospace experiments (structural, control, thermal, etc.) can qualify if the work involves uncertainty and testing.

Which expenses can be claimed?
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Wages of engineering and test staff, materials used in prototypes, R&D software, and qualifying third-party test services.

Which activities don’t qualify?
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Standard production, routine QA, admin tasks, or deploying existing off-the-shelf parts without testing or redesign.

How much can an aerospace firm save?
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Savings vary by size and scope. Some firms claim credits equal to 10%–15% of qualified expenses (federal only), and more when state credits apply.

How should aerospace firms document their R&D?
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 Track time spent on eligible projects, retain design/test records, log all changes and rationale, and store simulation/prototype outcomes — including failures.

Do space technology companies qualify for the R&D Tax Credit?
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Yes — if they’re creating or improving launch vehicles, communication systems, orbital robotics, or in-space operations under technical uncertainty, and are documenting the research effort.

What expenses are eligible?
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Engineering/test personnel wages, consumed supplies (prototypes, shielding), relevant software, and outside research contracts — as long as your company retains risk and technical control.

What doesn’t qualify?
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Routine launches or ops without experimentation, using commercial hardware with no change/testing, or reimbursed government research with no rights or risk.

How much can a space exploration company save?
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Well-documented firms often recover 10% to 15% of their qualified expenses — and more when layering in state credits

How should space companies document research?
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Focus on simulation vs. field test logs, version control, subsystem test reports, time tracking by project, and documentation of rework/redesign based on failed criteria or test outcomes.

Do satellite technology companies qualify for the R&D Tax Credit?
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Yes — if they’re developing new satellite buses, payloads, communications systems, or network software under conditions of technical uncertainty and experimentation.

What expenses are claimable?
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Engineer and test team wages, prototyping materials, R&D modeling software, and outside lab testing — if directly tied to your development efforts

Which activities don’t qualify?
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Standard satellite manufacturing without redesign, non-technical admin or business tasks, or deploying known commercial hardware without testing/modification.

How much can satellite firms save?
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Federal credits often return 10%–15% of qualified research expenses. With proper documentation and state incentives, total benefit can be even higher.

What kind of documentation should be kept?
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Logs of orbital simulations, payload integration trials, subsystem test results, engineering rework decisions, and time allocation records are key for claim defense.

Do propulsion/rocketry firms qualify for the R&D Tax Credit?
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Yes — if they develop new propulsion systems, reusable launch technology, hypersonic vehicles or conduct experimental tests under technical uncertainty.

What expenses can be claimed?
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Engineer/test staff wages, prototype supplies, simulation software, contract research tied to experimentation.

Which activities do not qualify?
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Routine production/maintenance, use of standard engines without innovation/testing, purely administrative tasks.

How much can such firms save?
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Savings vary by project size and scope, but many companies in this field claim sizable credits when properly documented.

How should they document research?
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Maintain logs of test results, simulation data, time‑sheets, design‑change history and proof of experimentation and uncertainty.

Do firearms, ammunition and missile‑defense firms qualify for the R&D Tax Credit?
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Yes — companies that develop new or improved munitions systems, interceptors, weapons platforms or manufacturing methods can qualify when structured correctly.

What expenses can be claimed?
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Wages of engineering/test personnel, prototyping supplies, simulation/model software, contract research tied to experimentation.

Which activities do not qualify?
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Routine production of standard weapons or ammo without innovation/testing, purely administrative tasks, or use of off‑the‑shelf systems without modification/testing.

How much can such firms save?
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Savings vary by company size and scope, but many firms claim significant credits when R&D is structured and documented properly.

How should these firms document research?
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Use detailed logs of prototypes, live‑fire tests, simulation results, time‑sheets, iteration records and proof of experimentation and uncertainty.

Do craft breweries and cideries qualify for the R&D Tax Credit?
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Yes. Many craft and small‑batch brewers and cider producers innovate with new recipes, fermentation/yeast techniques, packaging formats and sustainable operations—and these can qualify under the R&D tax credit rules.

What expenses can be claimed?
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Wages of staff involved in experimental activities; supplies used in testing new formulations or equipment; software used in modelling or controlling processes; and a portion of contractor expenses for external trial work.

What kinds of breweries or cideries are eligible?
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Eligibility is not limited by size. Whether you’re a nano or micro‑brewery, a regional craft producer or a cider‑house conducting bona fide experimentation in process, product, packaging or sustainability you may qualify.

What activities do not qualify?
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Standard recipe production without variation; routine tasting room operations; marketing campaigns; routine packaging without testing; applying fully proven methods without experimentation.

How much can brewers and cideries typically save?
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Savings vary depending on size, number of trials, level of experimentation and documentation. Industry benchmarks suggest that beverage manufacturers may raise tax credits for roughly ~18% of their R&D‑related costs. Even smaller operations conducting a handful of development batches may realise thousands of dollars in credits.

How should documentation be maintained?
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Keep detailed records of trial designs, batch logs, sensory/stability results, equipment logs, time sheet allocations, ingredient logs and process variations. These records support your claim under the IRS four‑part test (permitted purpose, technical uncertainty, experimentation, technological in nature).

Do distilleries qualify for the R&D Tax Credit?
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Yes. Spirits producers that develop new recipes, ageing or finishing techniques, separation/distillation processes, packaging innovations, or sustainability projects may qualify.

What expenses can be claimed?
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Wages of staff working on experiments, supplies for trial batches and packaging prototypes, software used in modelling/analytics, and a portion of contract research costs.

Which distilleries are eligible?
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Small craft distilleries through larger regional operations may be eligible, as long as they are engaged in experimentation of products, processes, packaging or operations.

What activities do not qualify?
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Routine production without experimentation, standard bottling runs, marketing or sales efforts, equipment installation without experimentation.

How much can distillers typically save?
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Savings vary by scale, trial volume and documentation. Industry sources indicate beverage companies may qualify for around ~18% of their eligible expenses.

How should documentation be maintained?
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Keep batch logs, process variation records, still/fermentation data, barrel logs, packaging test logs, employee time sheets, contractor invoices and software usage logs that tie to research projects.

Do farmers qualify for the R&D Tax Credit?
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Yes. Farmers and agribusinesses can qualify if they engage in systematic testing or trials that resolve technical uncertainty, not routine operations.

What expenses can be claimed?
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Wages, supplies, cloud software, and a portion of contract research directly related to qualified R&D activities.

Which crops are eligible?
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Common row crops such as corn, wheat, soybeans, and cotton can qualify when growers test new methods or technologies.

What activities do not qualify?
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Routine farming, post‑discovery production, and non‑technical tasks such as sales or general management.

How much can row crop farmers typically save?
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Savings vary by farm size and scope of activities. Industry reports suggest many row crop operations see $50,000 to $200,000 in annual credits when research activities are properly documented.

How should farmers document research?
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Maintain side‑by‑side trial data, soil and yield records, equipment logs, and employee time allocations to support claims under IRS audit guidelines.

Next Steps

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Software & Technology

FinTech R&D Tax Credits

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HomeIndustriesSoftware & TechnologyFinTech

Financial technology services, or FinTech, is an emerging industry that spans personal finance, consumer banking, wealth management, lending, and stock trading. As the demand for transparency and efficiency in finance grows, many companies provide their clients and investors with secure mobile apps and platforms. Your FinTech company may be eligible to claim the Research and Development (R&D) Tax Credit and increase its bottom line through significant reductions in federal and state tax liability.

Employee wages, supplies, cloud computer rental, and third-party contractor costs associated with research and development activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates. 

Examples of qualifying activities: 

  • Designing new data modeling applications
  • Creating novel financial platforms or user-friendly interfaces
  • Refining data mining techniques and conducting statistical analysis
  • Testing and optimizing fraud detection systems
  • Improving cybersecurity measures for existing applications

Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs? 

  • Compliance Managers
  • Cybersecurity Experts
  • Data Scientists
  • Financial Analysts
  • Full-Stack Software Engineers
  • Machine Learning Architects
  • Quantitative Analysts
  • Software Developers
  • User Interface/User Experience (UI/UX) Developers

Use our R&D Tax Calculator to estimate your potential benefit, and partner with Strike to claim your tax benefits with no up-front costs. Contact one of our experts today.

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