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What is Cloud Computing R&D Tax Credit?

Cloud Computing R&D Tax Credit

Cloud Computing R&D Tax Credit is an important incentive for businesses to recoup or capture when they invest in cloud computing research and development, services, cloud infrastructure, cloud servers, data storage, and cloud-based innovation. The credit is available to all businesses, regardless of size or type. Businesses can claim credit for expenses related to the development of new software, hardware, or other cloud-based products and services.


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Information on Tax Credits for Data Processing R&D


There are a number of tax credits available to companies carrying out data processing research and development (R&D). The credits are offered by both the federal government and individual states and can provide significant savings for qualifying businesses.

The federal Research and Experimentation Tax Credit is available to companies conducting qualified R&D in the United States. The credit is worth up to 14% of the amount spent on R&D and can be claimed against both federal income tax and payroll taxes.

Several states offer their own data processing R&D credits, which can be worth a significant amount of money. The credits vary from state to state but typically offer a percentage of the amount spent on qualifying R&D.

Tax Credit on AWS Application for R&D

In addition to the tax credit available for companies that invest in research and development, there is also a credit available for those that use cloud services for those activities. The AWS application for research and development may be able to help your company take advantage of both of these benefits.

By using the AWS cloud platform for your R&D needs, you may be able to qualify for the credit for cloud services, as well as the credit for research and development. The AWS application for research and development is easy to use and may help you get the most out of your investment in R&D.

Cloud Computing R&D Tax Credit Eligibility


If your company is using cloud computing services, you may be able to claim a portion of those costs as Research and Development (R&D) expenses. In order to qualify for the R&D credit, your company must be spending money on activities that qualify as research and development.

The key factor in determining whether your company’s cloud computing expenses qualify for the R&D credit is whether the activities involved are research or development. Activities that qualify as research are designed to create new or improved products, processes, or software.

If your company’s cloud computing expenses fall into either the research or development category, you may be able to claim them as R&D expenses.

Which Cloud Computing Expenses Qualify for R&D Credits?

There are many expenses related to cloud computing that may be eligible for the R&D tax credit. These include costs associated with setting up and using the cloud computing infrastructure, as well as costs incurred for developing or improving software that runs on the cloud. In order to qualify for the credit, however, your company must be able to demonstrate that the expenses were incurred in pursuit of qualified R&D activities such as:

  • Developing new or improved software applications
  • Testing and modifying software to increase its functionality or compatibility with other applications or systems
  • Designing cloud-based systems and architectures
  • Studying the feasibility of using cloud computing for specific business purposes.

If your company can demonstrate that it incurred expenses related to any of these activities, it may be able to claim the R&D tax credit.

Benefits of Cloud Computing R&D Tax Credit

Cloud computing is a rapidly growing technology that offers many benefits for businesses of all sizes. The R&D tax credit is a valuable benefit that can help your business save money not just on cloud and data costs but also on contract research expenses. The R&D tax credit can help also businesses with the following:

  1. Reduce your tax liability
    The credit can help give your company some tax relief This can leave you with more money to reinvest in your business or use for other purposes.
  2. Simplify your taxes
    The credit can help simplify your company’s tax return by providing a deduction for R&D expenses. This can make it easier to prepare your taxes and save you time and money.
  3. Expedite your R&D projects
    The tax credit can help you finance your R&D projects, which can help you get them done faster.
  4. Increase your competitiveness
    Innovation is key to staying competitive in today’s economy. The R&D tax credit can help you fund your innovative initiatives, which can give you major business opportunities.
  5. Gain a marketing advantage
    The credit can provide your business with a marketing advantage by helping you offset the cost of developing and marketing new products or services. The credit can also help you attract and retain employees, as it can make your business more attractive to potential hires.
  6. Increase cash flow
    The credit can help increase your company’s cash flow by providing a tax deduction for R&D expenses. This can free up cash that can be used to invest in other areas of your business.

Claiming your R&D Credit for Cloud Computing Expenses

To claim the credit for cloud computing expenses, you must be able to show that the expenses meet the definition of qualified R&D expenses.Qualified expenses are those that are related to the development or improvement of your company’s cloud technology such as employee wages, cloud computing costs, data costs, cloud provider, cyber security, and more. They must also be incurred in order to bring a new or improved product or process to market.

The process can be confusing, so it’s important to understand what’s required before you get started. Here’s an overview of the main steps:

  1. Make sure your company is eligible for the credit.
    Not every business is eligible for the R&D tax credit. In order to qualify, your company must meet certain criteria regarding its size and the nature of its research activities. Review the guidelines on the IRS website to see if you’re eligible.
  2. Determine how much you spent on R&D in the past year.
    In order to claim the credit, your company must have spent a certain amount on research and development activities in the past year. This figure is based on your total revenue, so you’ll need to calculate it carefully. The IRS has a detailed worksheet to help you figure it out.
  3. File the correct paperwork with the IRS.
    Once you’ve determined that your company is eligible and you know how much you spent on R&D, it’s time to file the appropriate paperwork with the IRS. This includes Form 6765, which is used to claim the credit, and Form 990 or Form 1120, which are used to report your company’s total revenue.
  4. Wait for the IRS to process your paperwork.
    It can take a few months for the IRS to process your paperwork and award you the credit. Be patient and keep track of your application status on the IRS website.
  5. Enjoy your tax refund!
    Assuming everything goes smoothly, you should receive a tax refund based on the amount of the R&D credit you claimed. This can be a great way to offset the cost of your research activities.

If you’re not sure how to complete any of these steps, talk to an accountant or tax specialist who can help you. The process of claiming the R&D tax credit can be confusing, but with the right help, it’s definitely doable.

How We Can Help

Boast makes tax refunds easier for businesses. Companies frequently have problems with their tax refunds, but with Boast, they can get their cloud computing R&D tax claims back in no time. Clients can get more money back faster and with fewer risks using our software platform and a staff of specialists.

Automated R&D Tax Credits for Cloud Computing

  • Payroll
  • Accounting
  • Jira
  • Github

The Boast platform gathers data from your technical and financial systems to identify and categorize eligible projects, time, and expenses—estimating along the way instead of only at the end—and getting you more money, faster, for less time, and risk.

  • Time Tracking
  • Cash
  • Audit Evidence
  • Tax Forms

Customer Success Stories

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TRAC Challenges Traditional Venture Funding with Innovative ‘Moneyball’ Approach to Business Investment

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Neo Offers the Future of Financial Services to Canadians Through Its Focus on R&D and Innovation

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Nexus Robotics Pioneers a New Approach to Agriculture Using Innovation, SR&ED, and Partnership with Boast

"R&D helps us accelerate our innovation. When you’re an early-stage company building in a new market, speed is critical. We’re very grateful for the R&D incentive program and the dedicated support and guidance from Boast."

Find Out How Much Money You Can Get From The Government

Our manufacturing R&D tax experts will quickly assess which of your activities are eligible for R&D tax credits. During this conversation we will highlight:

  • Determine what manufacturing activities qualify for R&D tax credits
  • Tactics to reduce your teams time in preparing your R&D tax credits
  • Estimate the total return you can expect in your current fiscal year
  • Provide ideas to maximize your current and past claims
  • Learn about the Boast platform, and how we simplify your claim process

Talk to a Manufacturing Expert


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