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Fondo Core Workflow B: R&D Tax Credits

Overview

Claim R&D tax credits through Fondo. Startups with US W-2 employees doing qualifying R&D can offset up to $500,000/year in payroll taxes (FICA). Fondo's CPA team prepares the Form 6765 study.

Prerequisites

• An authorized finance/tax owner, current professional guidance, complete source records, and a retention/access policy.
• A reviewed scope for any calculator or export; this workflow does not determine eligibility or replace tax advice.

Instructions

1. Gather approved source evidence and classify activities/expenses for review without altering originals.
2. Use an opaque case identifier and aggregate counts for workflow tracking; keep payroll, tax, and employee records in authorized systems.
3. Reconcile inputs with the responsible finance professional, document assumptions and exceptions, and obtain sign-off before filing or payment actions.
4. Preserve an audit trail and follow the organization's retention and correction process for any discrepancy.

Output

Create a review receipt with period, case ID, source-system references, owner, open questions, professional-review status, and next action. Do not include employee, payroll, tax-return, or bank details.

Examples

Use a fictional project and aggregate cost buckets to exercise the evidence-collection checklist. Record unresolved classification questions for the finance reviewer and confirm no filing, calculation, or payroll action is generated from the test.

R&D Credit Calculation

Qualifying R&D Expenses:
  W-2 wages for R&D employees:        $480,000
  Contractor payments (65%):           $78,000
  Cloud compute (AWS/GCP):             $36,000
  Software tools for R&D:              $12,000
                                       --------
  Total Qualified Research Expenses:   $606,000

Credit Rate (Alternative Simplified):  ~6-8%
Estimated R&D Credit:                  ~$42,000

Qualifying Activities

Timeline

Payroll Tax Offset (Startups)

Eligibility for payroll tax offset (Section 41(h)):
  ✓ Less than $5M gross receipts in current year
  ✓ No gross receipts in any year before the 5-year period ending in current year
  ✓ Filed as election on Form 6765

Offset: Up to $250,000 per year against employer FICA (6.2%)
        Up to $250,000 per year against Medicare (1.45%)
        Total: Up to $500,000/year in payroll tax savings

Error Handling

Resources

• Fondo R&D Credits
• IRS Form 6765
• R&D Credit FAQ

Next Steps

For troubleshooting, see fondo-common-errors.