R&D Tax Credit Calculator
Compare the regular research credit with the alternative simplified credit using qualified research expense inputs.
Selected estimated credit
$13,217Qualified research expenses
$194,500ASC before §280C reduction
$16,730Regular credit before reduction
$19,450Contract research counted as QREs
$19,500All three §41(b)(3) inclusion tiers are modeled and selected above: 65% for a standard contractor (§41(b)(3)(A)), 75% for a qualified research consortium (§41(b)(3)(C)), and 100% for energy research paid to an eligible small business, an institution of higher education, or a Federal laboratory (§41(b)(3)(D)). This estimate applies one tier to the whole contract-research figure — split the payments and run them separately if they fall in different tiers, and note the 100% tier reaches energy research only.
Planning estimate only. The four-part test, funded research, related-party rules, aggregation, base-period history, payroll-tax election, and documentation are not determined here.
What this tool covers
Calculation scope
- Includes the standard 65% contract-research fraction.
- Compares ASC and regular-method estimates.
- Models the reduced-credit election at the 21% corporate rate.
Frequently asked questions
What work qualifies as research?
Activities generally must meet the section 41 four-part test: permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation.
Can a small business use the credit against payroll tax?
A qualified small business may elect up to $500,000 of research credit against payroll tax, subject to the Form 6765 eligibility and filing rules.
Is the ASC always better?
No. The regular method can be larger when the historical fixed base is low, while ASC often needs less base-period data.
Sources
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