Security R&D Tax Credit

What is the Security Research Tax Credit?

As the world becomes more digitized and interconnected, data security importance has never been more crucial. Businesses must protect themselves from increasingly sophisticated cyber-attacks while complying with privacy regulations.

The Security R&D Tax Credit is available to companies of all sizes in all industries. It is used to offset expenses related to designing and developing new security products and procedures, improving existing security products, and conducting research to improve security technologies.

Also, the R&D Tax Credit will reduce your company’s income taxes for qualified research and development expenses. The credit is designed to encourage businesses to invest in security R&D and promote innovation in the security sector. This includes salaries paid to employees working on qualifying projects and materials and contract research expenses.

Security R&D Tax Credit

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Cybersecurity Research and Development Tax Credit

As tax rates continue to rise, many companies are looking for ways to reduce their tax liability. For that, there are tax credits, a valuable tool for businesses looking to reduce a company’s tax liability. By claiming these credits, companies can offset qualified research expenses, payroll taxes, and employee wages, and reallocate resources towards developing new and innovative security.

An example of this that is related to cyber security research is cybersecurity research tax credits, which can be used to offset the cost of developing new cyber security technologies or improving existing ones. This is to give incentive to this particular kind of research, as cybersecurity-related and recent ransomware attacks have raised awareness of the issue. Developing new technology to combat terrorism is becoming a critical challenge to cybersecurity companies in an ever-changing environment.

Cybersecurity research tax credits can help offset the costs of cybersecurity research and make it more affordable for companies to invest in these critical activities. By claiming these credits, companies can reinvest the savings into their business for innovation, fund research into vulnerabilities and threats, and find ways to protect against them.

There are two areas where tax credits can be particularly beneficial: cybersecurity research and contract research. By investing in these research areas, companies can make it easier to protect their data and assets from potential threats. All research and development activities involving this process qualify for the R&D tax credit. By innovating in cyber security, you may be able to obtain significant tax incentives.

Applied Security Research Tax Credit

The Applied Security Research Tax Credit (ASRTC) is a tax credit for businesses that engage in cybersecurity research and development. The credit is intended to encourage businesses to invest in cybersecurity R&D, which can help prevent cyberattacks and improve the overall security of the business.

The ASRTC aims to offset some of the costs associated with researching and developing new cybersecurity solutions. The R&D tax incentive is available to businesses of all sizes and can be used to cover up to fifty percent of eligible expenses. To be eligible, projects must be specifically focused on addressing cybersecurity and must aim to create new or improved cybersecurity recommendations.

To qualify for the ASRTC, businesses must have a tax liability of at least $5,000. The credit is equal to twenty percent of the eligible expenses incurred by the business, up to a maximum credit of $100,000.

Potentially eligible expenses include:

  • Wages paid to employees engaged in cybersecurity research and development;
  • Materials and supplies used in cybersecurity research and development; and
  • Equipment used in cybersecurity

The tax credit was designed to assist firms to counter the growing danger of cyber-attacks. It was created to encourage businesses to stay ahead of the curve when it comes to cybersecurity threats by incentivizing them to conduct research.

Securing your Software with the R&D Tax Credit

As the industry continually grows and adapts, the software has become one of the most important investments for companies across all industries. The R&D Tax Credit can provide significant tax benefits for these innovative expenditures. The R&D Tax Credit can be used to offset costs associated with developing or improving software, such as:

  • Designing new or improved algorithms
  • Developing prototypes
  • Conducting feasibility studies
  • Performing engineering analysis
  • Creating or modifying source code
  • Systems integration testing

To be eligible, the software must be considered technological in nature and must make a technical contribution to the company. Additionally, the work performed must represent a significant advancement over previous versions or competing products, and the company must intend to commercialize the software.

It encourages businesses of all sizes to invest in activities that help mitigate cyber threats. The credit is also available for expenses related to developing new or improved security products, services, or technologies; improving the security of existing products, services, or technologies; or conducting research into the prevention or mitigation of security threats. This can give you a competitive advantage when bidding on new projects. All of these benefits make the R&D tax credit an important tool for any software development company.

How We Can Help

Boast has helped many innovative companies recover their research and development expenses through the R&D Tax Credit. Our team of engineers and accountants uses our unique software platform to prepare and estimate claims throughout the year, allowing you to submit your claim faster, more accurately, and with larger reimbursements. Our clients have increased their R&D Tax claims using Boast quicker and with less risk of audit.

Automated R&D Tax Credits for Security

  • Payroll
  • Accounting
  • Jira
  • Github
Innovation Chart

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


Pisano Accelerates Investing Innovations With SR&ED Tax Credits

akitig agri-tech sred example

Akitig Creates the Future of Agri-Tech Through Innovation and Investment in R&D


Rival Technologies Disrupts the Massive Market Research Industry Using Innovation and Tax Credits Recouped in Partnership with Boast

Frequently Asked Questions

Tax credits can be applied by any organization engaged in activities that involve developing new or innovative products, techniques, formulas, or inventions. Those benefits are partly due to the 2015 Protect America from Tax Hikes Act. This legislation boosted the monetizability of small-to-medium-sized businesses.
The credit is worth up to 20% of eligible R&D expenditures. Qualified research expenditures must be made during the applicable tax years.
Eligible expenses include salaries, wages, and contracts paid to arm’s length parties for qualifying R&D work. Eligible expenses also include costs incurred for materials, supplies, and equipment used in the conduct of eligible R&D activities. To be eligible, your research must meet certain requirements set forth in the internal revenue code by the Internal Revenue Service (IRS).
To be eligible, a security-related activity must aim to create new or improved security products, services, or technologies. The products, services, or technologies must be innovative and must offer a significant advance over what is currently available.
The credit can be claimed by businesses on their annual tax return. Businesses can choose to either deduct the credit from their taxes owing or receive a refundable tax credit that can be applied against future tax liabilities. Tax credit experts can help you go through the claims process smoothly.
"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

Your free 1-hour consultation includes a detailed review of our platform, your projects, processes, and financial data by one of our R&D Tax experts.

Talk to one of our experts to see how outsourcing your R&D tax claims to Boast can get you more money back from the government and help you regain the time you need to run your business.

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