Entrepreneurs Alex Popa and Lloyed Lobo are helping businesses across the United States and Canada streamline access to government funding.
Small businesses and startups employ nearly half of the North American workforce, but running a startup can be exhilarating and exhausting at the same time.
With COVID-19 causing much of the economy to plummet, millions of entrepreneurs continue to see their customer bases shrink while expenses continue to pile up.
Since the beginning of the crisis, 74% of startups have had to terminate full-time employees, 39% of all startups have had to lay off 20% or more of their staff, and 26% had to let go of 60% or more of their employees (Startup Genome).
To aid the crisis, the US and Canadian governments have provided much-needed stimulus funds to startups and small businesses under programs such as the Paycheck Protection Program (PPP), Canada Emergency Wage Subsidy (CEWS), etc.
However, another key program, particularly of help to technology startups, is the R&D tax credit program that has been around since the 1980s in both the US and Canada.
How did Boast.AI get started?
Alex worked at a large accounting firm and understood first hand how painful and time-consuming the R&D tax credit application process was for companies.
Alex and Lloyed had known each other for over 20 years as they met in college while studying Engineering.
Alex and Lloyed were discussing ways to simplify the R&D tax credit application process and make it easily accessible by leveraging artificial intelligence and Boast.AI was born.
What started as an office out of Alex’s spare bedroom has quickly grown into a thriving business with offices in SF, Toronto, Calgary, Vancouver, serving customers on both sides of the border.
What is the R&D Tax Credit Program?
Each year the US and Canadian governments provide billions of dollars in R&D tax credits to businesses for developing new or improving existing products and technologies.
In the US, the R&D tax credit can be used to offset income taxes or to offset up to $250,000 per year in employer social security taxes which comes in the form of a refund check from the IRS.
Canadian Controlled Private Corporations, on the other hand, can get a cash refund of up to 64% of their R&D spend under the Canadian R&D tax credit program called SR&ED.
Why is it difficult for businesses to prepare the R&D tax credits?
Applying for the R&D tax credit can be a very time-consuming process as businesses need to identify all the projects they worked on in the tax year and ensure that their projects meet the certain eligibility criteria outlined in the tax law.
Businesses need to demonstrate that they attempted to develop new (or improve existing) products, that they faced technological uncertainties during the development process that could not be resolved with publicly available information, and they followed a systematic process to evaluate one or more alternatives to eliminate technological uncertainties and achieve the desired end result.
Next, businesses are required to produce a technical narrative of eligible projects and identify expenses associated with them such as employee salaries and time.
All expenses claimed for R&D tax credits require backup evidence in order to mitigate the risk of getting denied in an audit by the IRS or the Canada Revenue Agency. In fact, the R&D tax credit has been consistently listed in the IRS’ Dirty Dozen List of tax scams every year.
Once the information is compiled, it needs to be entered into the respective R&D tax credit forms and filed with a company’s corporate income tax return.
Time is an expensive resource for startups and small businesses, particularly during a pandemic when there is much uncertainty and critical business needs to handle.
How does Boast.AI help streamline the R&D tax credit application process?
Boast.AI’s Research and Development Tax Credit management platform streamlines and automates the process of filing for R&D tax credits.
Behind the scenes, Boast integrates with a company’s technical project tracking systems such as Jira, GitHub, etc. and payroll and bookkeeping systems such as Gusto, Quickbooks, etc. to help identify and categorize R&D tax credit-eligible projects and costs, and automate the application process.
Boast makes R&D tax credit applications hassle-free by managing the entire process including identifying eligible projects, preparing the technical narrative and financial reports, compiling the R&D tax forms, and audit representation. Boast only charges a fee when the money is received from the government, so there are no upfront costs. Visit Boast.AI for more information.