R&D Binder

Federal R&D tax credit estimator

Inputs

Full-time engineers plus contractors counted at FTE-equivalent. Open-source contributors and dependabot-style bot commits do not count.

Salary plus benefits plus payroll tax plus equity plus engineering-attributable overhead. National median for senior software engineers in 2026 is roughly $180,000 fully loaded.

Advanced (one optional input)

Default 80 percent (the substantially-all threshold from Treas. Reg. 1.41-4(a)(6)). For most product-engineering teams, 70 to 90 percent of paid engineering time qualifies; build / continuous-integration / documentation / lint / cosmetic-copy commits are excluded.

This estimator runs entirely in your browser. We do not capture, store, or transmit your inputs. Reload the page to clear all values.

Methodology and limits

Two short collapsibles. Read both before quoting this estimate to a board, a CPA, or yourself.

How this is calculated

The estimator uses the Alternative Simplified Credit (ASC) method per 26 U.S.C. Section 41(c)(5). It is the most commonly elected method for software companies because it does not require pre-1990s historical research-spending records.

The math is three steps:

  1. QRE wages = FTE * avg_loaded_cost * R&D_qualifying_percent. This is the qualifying-wages basis. Supplies, computer rental (cloud compute), and contract research are not included in this estimator (they typically add 10 to 30 percent more QRE for SaaS companies).
  2. Federal credit (low end) = QRE * 6 percent. This is the rate for first-time filers with no prior 3-year QRE history.
  3. Federal credit (high end) = QRE * 14 percent. This is the rate for filers with a 3-year ASC base, applied to QRE in excess of 50 percent of the 3-year average. We bracket the high end at the full ASC rate to show what you would converge to over time.

The actual credit is somewhere in between for most filers. Your CPA's calculation of the exact rate depends on your prior-year QRE history (or absence of history), your fiscal year, and whether you also elect the Section 280C reduced-credit option.

Tier match by Engineering FTE: Indie (up to 5), SaaS Standard (6 to 25), Scale (26 to 60). Above 60 FTE is a custom-scope conversation; talk to us.

What this estimate is not
  • Not legal or tax advice. This is a marketing-page calculator. The actual credit on your return is determined by your CPA based on your books, your prior-year QRE history, and the qualifying activities documented in the binder.
  • Not a guarantee. A real binder may produce a higher or lower credit depending on your contractor mix, supplies and cloud-compute spend, foreign-research carve-outs (Treas. Reg. 1.41-4(c)(7)), funded-research analysis (Section 41(d)(4)(H)), internal-use software (Section 41(d)(4)(E)), and the substantially-all threshold per business component.
  • Federal only. California, New York, Texas, Pennsylvania, and 30+ other states have their own R&D credits that layer on top. Most states are 5 to 15 percent of qualifying wages; California's R&D credit alone is up to 15 percent. Multi-state add-on workpapers are available at $995 per state.
  • Does not include Section 174A expensing. The OBBBA-era Section 174A domestic-research expensing is a separate tax benefit (full-year deduction instead of 5-year capitalization) and does not reduce or change the Section 41 credit.
  • Does not assume any particular qualifying-activity scope. "Engineering FTE" in the input is total engineering headcount; the percentage qualifying knob is the operator-controlled lever.
  • Does not include audit-defense engagement scope. If the IRS opens an Information Document Request (IDR), we engage on a separate hourly scope ($250 per hour); the binder itself ships with audit-defense flag analysis but the response is not bundled.

If the number looks right

Two paths.

Order a binder See the sample binder first