Payroll providers play a crucial role in the process of obtaining an R&D tax credit refund for startups. After an accounting firm like Kruze Consulting completes the R&D tax credit study and incorporates it into the company’s tax return, the payroll provider submits Form 8974 to the IRS and Treasury. This form contains essential details about the company and the size of the credit, and it triggers the refund process. Payroll providers act as key intermediaries, making sure that the necessary information reaches the IRS to initiate the rebate.Having your accountant prepare the documentation - and then doing your monthly books - helps keep the payroll provider… honest. We’ve seen too many cases where the payroll provider incorrectly filed the forms, or even worse, forgot to file them. Since we watch our clients’ books when we do their monthly accounting, this helps our clients have a second set of eyes to make sure the credit comes through correctly!There are two main methods for receiving the R&D tax credit refund: the post-quarter refund and the real-time credit. The post-quarter refund typically arrives six to eight months after the submission, often in the form of a check, giving the startup a significant financial boost. Alternatively, some payroll providers, like Gusto, offer a real-time credit option where they stop withholding the Social Security portion of the employer’s payroll taxes immediately after the submission of Form 8974. This option, although it comes with a small monthly fee, allows startups to benefit from the rebate right away by reducing payroll taxes in real-time.Make sure you maintain strong relationships with both the accounting firm and payroll provider. That will help you have a smooth and efficient R&D tax credit refund process.