Apply R&D tax credits calculated by your CPA or R&D firm

There are a few steps you need to take as an accountant to help your clients claim R&D tax credits.

Part 1: Credit for qualified research

1. Sign in to your Partner dashboard.
2. Go to the Clients section.
3. Click the Actions menu on the far-right.
4. Click Third-party tax credit service.
5. Select the type of business income tax return the company uses.
6. Select the Fiscal Tax Year the company uses.
7. Enter the date the company filed its tax return.
   • The filing date is used to determine the first eligible quarter that the credit can be claimed.
8. If this company filed under a different FEIN at any point in their corporate tax year, the previous FEIN is required for the Federal R&D credit filing.
9. Enter the total Federal R&D credit claimed.
   • This amount can be found on Line 36 of the 2024 of Form 6765.
     • If you're applying credits from the 2023 Form 6765, the amount can be found on Line 44.
10. Click Save & Continue.

Part 2: Previous credit claims

1. Select if your client has claimed part of this credit on a Form 941 this fiscal year.
2. If the company claimed the credit in any prior quarters, enter these values so we can determine their remaining Federal R&D Credit.
3. Click Save & Continue.

Part 3: Before you submit

1. Review the information to make sure everything is accurate. 
2. Once you're ready, click File Tax Credit. 
3. Determine if you’d like this credit to be taken in real-time (recommended), or quarterly (free).

The client should see the refund from the IRS about 8–12 weeks following the 941 filing (if not claiming the credit in real-time).

If your accounting firm processes payroll through Gusto, third-party R&D tax credits can be claimed for your firm by following the steps below.

1. Sign in to your Partner dashboard.
2. Under "Tasks", toggle to Firm. 
3. Click Redeem third-party R&D tax credits.
4. Complete the R&D tax credit questionnaire to claim third-party R&D tax credits.

1. Sign in to your Partner Dashboard.
2. Go to the Clients tab.
3. Go to the client you want to claim credits for and select the three-dot menu under "Actions".
4. Click Redeem third-party R&D tax credits in the dropdown.
5. Complete the R&D tax credit questionnaire to claim third-party R&D tax credits.

Reminders

• The option to claim the credit in real-time only appears in your account if there's a remaining balance to apply credit to.
  • It also depends on when your accountant filed your most recent business income tax return because you're eligible to claim the credit on the first day of the following quarter.
    • Example: If your return was filed in May, the credit period begins July 1st (the first day of the next quarter) and runs through June 30th of the next year.  
• Only one credit can be claimed at a time until the full amount is used up. 
• Gusto does not apply the real-time R&D tax credit to Medicare, even thought the IRS allows for it to be applied to employer Medicare once the employer's share of Social Security is exhausted.
  • We'll report any Medicare credit amounts on the quarterly filings and the IRS will refund the company. 
• If you claim your tax credit with a third party, you’ll be charged $100/month in any month in which you claim the R&D tax credit in real time, however this is free if you claim your tax credit using Gusto.

After you’ve completed an audit of your company’s R&D expenses with your accountant, and filed Form 6765 with your business’ income tax return, your accountant can set you up to claim the credit in Gusto. Only one credit can be claimed at a time until the full amount is used up.

Your accountant will claim the credit for you using their accountant profile. They’ll need a few things first:

• Your business’ most recent annual income tax return;
• Form 6765;
• Any previous Form 8974, if you’ve already claimed part of the credit

Important: Your accountant will need to submit all the necessary information to Gusto by the 15th of the last month of a given quarter in order for it to be included in the quarterly filing.

The R&D Credit cannot start being claimed until the quarter after your Federal Tax Return has been filed.

• Example: If an admin enters in 3/15/20 (Q1) as the Income Tax Return filing date, the credit cannot not start being applied until 4/1/20 (Q2).

Gusto will then complete and file Form 941 as well as Form 8974, so your company can claim the credit and receive the refund. The IRS estimates the refund will take 10–12 weeks to arrive after we file.

Resources

• Form 941 instructions
• Form 6765 instructions
• Form 8974 instructions
• IRS final ruling

Once your company is set up to claim the credit, you can review summary reports about your federal R&D tax credit in the Reports section of your account.