Filing an Extension for R&D Tax Credits

Early spring is a busy time of year for many businesses who are looking to meet their income tax filing deadlines. If you’re only just learning about the federal research and development (R&D) tax credit, don’t worry, you may still be able to file a claim for the tax credit by filing an extension or by amending your income tax return.

To apply your federal R&D tax credit against your payroll tax liability, you ideally should claim it on your original income tax return — which is why the option to extend is so important for startups. However, companies that are unable to apply the tax credit against their payroll tax liability may be able to apply their R&D tax credit against their income tax liability by amending their income tax return – and can even consider performing a ‘lookback’ to capture up to three years of unclaimed tax credits. Whichever option you may be eligible for, you don’t have to miss out just because your tax filing deadline may have already passed.

Keep reading for some tips on how to approach claiming the R&D tax credit if the tax deadline is approaching or have already passed.

When to file an income tax extension

Your income tax extension needs to be filed by your original income tax filing date. Depending on your type of business entity, your tax filing due date is either mid-March or mid-April.

If you have already filed your taxes but the deadline has not yet passed, instead of filing an extension, you can consider filing what’s called a superseding return. This essentially “undoes” the filing of your original income tax return, allowing you to re-file and include the necessary documentation for the federal R&D tax credit.

If the deadline has already passed, filing an amended income tax return is your only option and you may have to submit additional information.

Filing an income tax extension

Filing an extension is actually very common! Talk with your CPA or tax preparer to ensure it’s the best decision for your business. Once you decide to file an extension, the process is straightforward.

For most businesses, your tax preparer will file IRS Form 7004 to extend your income tax return deadline. For flow-through businesses extending their income tax returns, shareholders or partners may also need to extend their individual tax returns.

Is the federal R&D tax credit worth it?

Yes! If you’re considering claiming the federal R&D tax credit, working with TriNet Clarus R+D can help streamline the process and help you maximize your efforts. We’re dedicated to helping your business and providing a peace of mind. Don’t miss out on the opportunity to recoup valuable resources for your innovative work—reach out to TriNet Clarus R+D today to get support in claiming the federal R&D tax credit with confidence.

© 2024 TriNet Group, Inc. All rights reserved. TriNet Clarus R+D does not provide legal, tax or accounting advice. The information herein and the opinions expressed may not apply to your company or scenario, so you should consult with your own advisors on how best to proceed.

This post may contain hyperlinks to websites operated by parties other than TriNet Clarus R+D. Such hyperlinks are provided for reference only. TriNet Clarus R+D does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on our website does not necessarily imply any endorsement of the material on such websites or association with their operators.

© 2024 TriNet Group, Inc. All rights reserved. TriNet Clarus R+D does not provide legal, tax or accounting advice. The information herein and the opinions expressed may not apply to your company or scenario, so you should consult with your own advisors on how best to proceed. 

This post may contain hyperlinks to websites operated by parties other than TriNet Clarus R+D. Such hyperlinks are provided for reference only. TriNet Clarus R+D does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on our website does not necessarily imply any endorsement of the material on such websites or association with their operators.