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FAQs About Tax Credits in Zenefits Payroll

The Federal Research and Development (R&D) tax credit, also known as the Research and Experimentation (R&E) tax credit, is intended to reward U.S. based companies to increase their investment in Research and Development activities. Your company may qualify for the R&D tax credit if you are a qualified small business, and you perform qualifying research activities, such as developing new products or enhancing processes, or experimenting with new technology, among others.

To claim this credit, your company must elect to apply the R&D credit against payroll tax liability by filing the Federal form 6765  alongside your business income tax return. The tax credit can then be claimed by filing the Federal form 8974  as an attachment to your quarterly 941 payroll tax return.

You may reference the IRS site for more detailed information on this tax credit and its filing process.



R&D tax credit information from your Federal form 6765 can be entered into the Tax Payments & Credits flow in the Taxes tab of your Payroll app (beta only at this time).  

Once your form 6765 claim information is entered, Zenefits will calculate the appropriate claim amount and generate a Federal form 8974  to file as an attachment to your quarterly 941 payroll tax return. 

Your R&D tax credits will be applied to your quarterly payroll tax returns during filing and you will receive credit refund amounts directly from the IRS. 

This beta is available for Zenefits Payroll customers. If you'd like to participate in the beta for this initial functionality, please reach out to our support team to be added. 

Once you have been provided access to this beta functionality: 

  1. Open the Payroll app on your Zenefits dashboard. 
  2. Click on the Taxes tab and navigate to Tax Payments & Credits in the left-hand menu. 
  3. To add your R&D Tax Credit, fill in the appropriate questions to indicate that you have claimed credits on IRS form 6765 and select the year(s) in which the form was filed. Provide the corporate income tax return details and the amount(s) to be claimed, and click the Next button. 
  4. You will be directed to the credits summary page. This page will show you the entries you have made, but have not yet claimed. You may still edit the information you have submitted at this time. 
  5. When you are ready to claim your credits, review your information for accuracy and click the Claim Credit button. Note: Once you click the Claim Credit button, you will no longer be able to edit your submission information.
  6. Read and select the acknowledgement  box in the pop-up window and click the Confirm button. 
  7. You will now see your submitted claimed credits on the Tax Credits & Payments tab. 
Note: The current beta feature does not allow for credits to be claimed for previous quarters. If a credit needs to be claimed on a  941 return which has already been filed, this will need to be handled via an amendment to the 941 outside of the beta functionality.
At this time, amendments for R&D tax credits are handled manually via our Support team. If you need an amendment processed, please reach out to Support. 



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