- Your credit, calculated both ways. Regular Credit and Alternative Simplified Credit, so you take the larger of the two.
- Completed tax forms. IRS Form 6765 and California Form FTB 3523, included in your ready-to-file credit package.
- A documentation package. Project write-ups, survey results, expense summaries, and a methodology memo that tie every number back to your data.
How It Works
You end up with a ready-to-file R&D credit package. Here's what's in it, and the five steps that get you there.
What you walk away with
Your part takes a few hours, spread across the steps below. TaxHound handles the calculations, forms, and documentation.
1
Define your qualifying projects
Tell us about the key projects that were technically challenging. What problems did your team solve? What uncertainties did you face?
What makes a project qualify for the R&D tax credit?
Projects qualify when they involve all four:
- Permitted purpose: A new or improved product, process, software, formula, or technique
- Technical uncertainty: You didn't know if it was possible or how to do it
- Process of experimentation: Your team tested alternatives or iterated on solutions
- Technological in nature: Relied on engineering, computer science, or physical sciences
We walk you through a simple set of questions (called the "four-part test" by the IRS) for each project to see if it qualifies.
2
Upload your financial data
Upload headcount, payroll, contractor invoices, and prior tax returns.
What data do I need?
- Headcount reports: Basic employee information
- Payroll data: Wages paid to employees
- Contractor invoices: Payments to vendors for R&D services
- Prior tax returns and R&D history (if applicable): IRS Forms 6765, 1120, and other relevant tax documents
Most payroll systems export this data directly. You can enter directly in the app or use a CSV file upload.
3
Complete a guided time survey
We send surveys to your team to estimate time spent on qualifying work. Takes 5 minutes per person.
How do the surveys work?
Each employee gets a personalized link to a simple survey that asks:
- What projects did you work on this year?
- What percentage of your time was spent on each project?
- What technical challenges did you face?
Surveys are designed to be completed in under 5 minutes and are mobile-friendly.
4
Make form elections (TaxHound guides you)
Choose between different methods and make required elections. We lay out each option in plain English, with the tradeoffs, so you can make the call.
5
Review your credit and download your package
Walk through TaxHound's credit calculation with our review assistant, then download all forms and documentation.
What's included in the documentation?
Tax Forms:
- IRS Form 6765 (Federal R&D Credit)
- California Form FTB 3523 (California R&D Credit, more states coming)
Supporting documentation:
- Methodology memo explaining the tax rules and the TaxHound approach
- Project listings with qualification questionnaire details
- Employee-to-project activity matrices
- Contractor invoice qualifications
- Summarized qualifying R&D expenses
- Credit computation details