Search Engine Development R&D Tax Credits
What is the Search Engine Development Tax Credit?
The Search Engine Development R&D Tax Credit is a non-refundable tax credit that may be claimed by qualified businesses that engage in developing and registering search engines in Canada. This research and development (R&D) tax credit is equal to 15% of eligible expenditures incurred in developing the search engine.
The R&D tax credit is intended to encourage and innovate businesses to invest in Canadian search engine development and help offset some of the costs associated with development and manufacturing. This includes eligible expenditures of physical and cloud based servers, wages of software engineers, data scientists and SEO consultants hired to create the search engine.
To be eligible, the company must be promoting, licensing, or providing access to the search engine for public use.
R&D Tax Credit Benefits for Search Engine Development
The Search Engine Development Tax Credit offers a number of benefits to businesses, including:
- For each qualified dollar, you may receive a large reduction in federal and state R&D tax credits.
- Create a dollar-for-dollar reduction in your federal and state income tax liability.
- Increase your company’s earnings-per-share while also reducing your effective tax rate.
- You can carry forward your unused Tax credits up to 20 years.
- Take advantage of the federal R&D tax credit for payroll tax and wages.
- Technological opportunity advancements to maintain and stay ahead of industry competition.
How To Apply For the Search Engine Development R&D Tax Credits
R&D tax credits are available for businesses that invest in eligible search engine development equipment and services. Here are the steps in claiming the credit:
Step 1: Collect your documents.
You’ll need your tax return from the previous year, as well as proof of your qualifying research and development costs.
Step 2: Calculate your credit.
Your business’s eligible search engine development expenditures are the basis for the credit. We recommend using Boast tax calculator to determine how much money you may get back.
Step 3: Complete and submit your tax return.
To qualify for the qualified residence exclusion, you must submit documentation of your eligible search engine development expenditures with tax returns.
Step 4: Claim your credit.
When you submit your return, one of two things may happen: you can take the credit as a tax reduction or get a refundable credit.
Applying for the credit is easy and can save your business money on taxes. It is definitely worth considering if you are engaged in search engine development. Be sure to consult a Boast representative to ensure that you are eligible and to get help with the application process.
Potentially Qualifying Industries and Innovations
The following are some industries and innovations that could potentially qualify for the Search Engine Development Tax Credit:
Internet search engines – including algorithms, web crawlers, and indexing
Data mining – including text mining, market basket analysis, and predictive analytics
Natural language processing – including machine translation, text classification, and sentiment analysis
Knowledge representation – including ontologies, semantic networks, and rule-based systems
Information retrieval – including search engine optimization (SEO), web ranking, and recommender systems
Recommender systems – including content-based filtering, collaborative filtering, and hybrid methods
Web mining – including web content mining, web structure mining, and web usage mining
Information retrieval – including search engine optimization (SEO), link analysis, and query expansion
User interface design – including user experience (UX) design and usability testing
Web development – including website design, web application development, and eCommerce integration
What Are The Requirements?
To be eligible for the Search Engine Development Tax Credit, your business must:
Be engaged in search engine development – This includes developing algorithms, web crawlers, indexing software, data mining tools, natural language processing software, knowledge representation systems, information retrieval systems, recommender systems, or user interface designs for search engines.
Your business must generate revenue – By selling, licensing, or providing access to the search engine. This can be done through advertising, subscriptions, or other means.
Have qualified expenses – Qualified expenses include research and experimentation costs, wages paid to employees engaged in search engine development, and contract labor costs incurred for search engine development.
Include the following documentation:
- A description of the search engine being developed;
- A description of the innovative aspects of the search engine;
- A description of how the search engine will generate revenue;
- A description of the expenses incurred in developing the search engine;
- Payroll records or contract labor invoices to support the expenses claimed;
To learn more about the requirements and how to apply, contact a Boast representative today. We can help you determine if your business is eligible and assist with the application process.
How We Can Help
Boast helps companies of all sizes redeem their research & development costs from the government. Boast offers a tax credit calculator platform that allows you to estimate your claims throughout the year to complete your claim more efficiently, accurately, and with a larger refund. Boast’s engineers and accountants have helped clients maximize their R&D Tax incentives with less time and audit risk. Use Boast to get the most out of your R&D Tax claim.
Automated R&D for Search Engine Development
- 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
Frequently Asked Questions
Q:How to qualify for the Search Engine Development R&D tax credit?
A:
The R&D tax credit is available to businesses or software developers that incur costs related to developing new search engine marketing technologies. The R&D tax credit is available to both big companies and qualified small businesses that can be used to offset the cost of search engine projects and spend their finances on other resources.
Q:How to be eligible for the R&D tax credit?
A:
To be eligible for the tax credit, your research activities must qualify, and you must submit documentation such as annual gross receipts, wages for the employees involved in the project, and other expenses related to R&D. Qualified research expenses must present complex challenges, eliminate uncertainty, and must be undertaken to develop a new or existing product or service.
Q:How to Claim the R&D tax credit?
A:
Businesses of all sizes can claim the R&D tax credit, including sole proprietorships, partnerships, and corporations. The R&D tax credit can be claimed on the business’ taxable income for the year in which the expenditures were incurred.
"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."
CHRISTIAN KARRER, PLANTIGA VP FINANCE AND STRATEGY
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.
Fill out the form to schedule your demo.
