5 ways tech can help identify and secure R&D tax credits

te pattern slimhero 2 grey
te pattern slim tangerine 3

No search results

Is your company getting all the R&D tax credits it deserves? Probably not. In fact, only 38% of CFOs reported that they were very confident that they were taking full advantage of R&D tax credits for cloud investments. One reason may be the complicated efforts many companies must face in applying these credits and the difficulty in accessing the documentation to support their claims.

Technology, when joined with expertise, can help. Here are five ways cloud-based software for project management, remote collaboration, data analysis and reporting can help access more R&D credits, improve regulatory review results and save employee time.

1. Find and use more data

To get the state, federal and global R&D tax credits to which you’re entitled, it’s important to both correctly identify qualifying projects and find supporting data and documentation. But this information is often dispersed across incompatible systems, which may reside in different tax jurisdictions, including foreign countries. Data may also be held in systems (such as project tracking software for agile development) to which tax has no access.

Specialized R&D credit software can help locate data, gather it, standardize it, cleanse it and present it. It can create a single pane view of data and show how it all relates to various state, federal and international rules. That can help you craft a unified, global R&D credit strategy.

2. Enhance cross-border collaboration

If your company conducts business in more than one jurisdiction, you may have different state, federal and global tax teams. Besides gathering and analyzing data differently, they also may not be communicating regularly or working together seamlessly. That could lead to duplicated efforts as your tax teams crunch the same data or apply for similar incentives in different ways. It could also lead to missed opportunities.

Besides helping to collect, standardize and analyze data in light of various state, federal and international laws, cloud-based software can also support accessible, secure remote collaboration so teams can work together smoothly. It can also provide a unified record of different teams’ initiatives so a team in one jurisdiction doesn’t repeat work already done in another.

3. Ease the burden on key employees

Often, the only source of information is inside employees’ heads. You may need to survey people in multiple functions that touch innovation efforts: the business, IT, engineering, marketing, operations and digital transformation as well as R&D teams. Questions may have to cover employees’ precise work and technical challenges, the contributions of various teams and contractors, the records of supplies consumed during the R&D process and more. In larger companies, you may have to talk to hundreds of employees — all of whom are busy with their main jobs.

Based on data already gathered and detailed databases of state, federal and international laws, software designed to handle the complexities of R&D tax credit studies can help identify the right people, draw up the right survey questions and keep track of who has already answered what. That can reduce the risk of asking the wrong people the wrong questions — the same questions more than once. By automating much of the surveying process and the accompanying analysis, it can also ease the burden on tax employees.

4. Support a flexible strategy

R&D tax legislation and guidance is constantly evolving. So, most likely, is your innovation portfolio. Ideally, tax would be able to outline all the possible credits different potential investments would qualify for. It may be possible for R&D credits to pay for a significant part of such investments. In some cases, these credits could make projects financially feasible that otherwise wouldn’t be — enabling a tax-forward strategy to be a driver of a company’s digital and cloud transformation initiatives.

Suitably flexible cloud-based systems, which offer tax continuous access to data and analysis, can support an evolving and forward-looking R&D tax credit strategy.

With real-time access to data available in a single dashboard that connects this information to the latest guidance from tax authorities, you can quickly adjust strategy and provide more accurate projections of potential tax value.

These tools can also provide a planning space for a broader incentives strategy, including ESG considerations.

5. Prepare for controversies

The controversy landscape has become more challenging. The IRS, for example, issued in late 2021 Chief Counsel Memorandum 20214101F with onerous new requirements for specificity and documentation to back up refund claims for R&D tax credits. The problem is that supporting documents may be scattered across different systems, sometimes in different countries. Tax may not have easy access to this information or even know where to look for it. 

Specialized R&D tax credit software can help not just claim the appropriate credits, but secure the claims. By helping to collect, label and organize supporting documentation, and by presenting it in a single source of truth, these tools can facilitate and partially automate efforts to support claims. The result can be both time saved for the tax team (and other key employees) and improved regulatory review results.

Tax leaders can be technology leaders too

The power of cloud-based project management, collaboration, analysis and reporting software to identify and secure more R&D tax credits, while reducing time and effort, is part of a broader trend: for tax professionals to be technology leaders. This trend is apparent in the tech-forward attitude of many tax leaders. A recent survey found, for example, that 66% will invest in technology to support reporting this year and 52% in technical upskilling. 

Tax will always be about people, since no software or gadget can take the place of your skilled and engaged professionals. But increasingly, tax can also be both the model and a source of funds for people throughout the whole organization to do better, more interesting and more collaborative work with the help of technology.

Appropriate alt text for the image - square card

R&D tax credits — are you ready for what’s next?

PwC’s Global Incentives Solutions tool helps companies calculate and document R&D credits and other incentives.

Learn more


Jeff Jones

Partner, US R&D Services Leader, PwC United States


Brett Ritter

Partner, National R&D Tax Services Leader, PwC United States


Next and previous component will go here

Follow us