How R&D Tax Credit Platforms Are Approaching the One Big Beautiful Bill Act

It’s selling season for R&D tax credit service providers. 

When Congress passed the One Big Beautiful Bill Act (OBBBA) earlier this month, it dramatically expanded the tax breaks businesses can claim for investing in domestic R&D. That’s driving demand — particularly among SMBs — for tax credit service providers who can help them make the most of their potential savings. 

“Surprisingly, a lot of technology businesses don't realize this exists,” said Ken Knotts, VP of Marketing at Arvo, an all-in-one tax and accounting platform. “There’s a big opportunity for us to drive awareness. Over the next 6-12 months, you’re going to see a lot of companies in this space make a heavy push on the marketing side.”

To capitalize on this opportunity, tax credit companies must win clients with standout services. The winning formula? Automated solutions that deliver savings fast, demand minimal effort from businesses, and come at a competitive price. To do that, they’ll need to leverage the clients’ own data: project management details plus accounting and employment data. But the key (and the challenge) is accessing that data. 

In this article, we’ll briefly explore exactly what changed with R&D tax credits through the One Big Beautiful Bill Act, how tax credit service providers can capitalize on this selling opportunity, and how providers like Arvo and Neo.Tax leverage integrations to do the heavy lifting for their clients. 

What changed for R&D tax credits under the One Big Beautiful Bill Act

To put it briefly, the One Big Beautiful Bill Act reversed a change that went into effect in 2022 that forced companies to amortize their R&D spend over a 5-year period. Now, these businesses can deduct those expenses from the current year’s tax bill, dramatically reducing what they owe.

The OBBBA even went a step further, allowing companies to elect a catch-up deduction for their unamortized R&D expenses from the last three years. Small businesses get an even bigger break: if they have less than $31 million in gross receipts from 2022-2024, they can opt to retroactively expense all of their expenses. 

The catch is that they only have this year to claim those retroactive credits. That’s a big job, and a major reason why more businesses will need a tax credit service provider ASAP. 

How automation and integrations improve R&D tax credit services

Demand may be up, but closing deals is about more than offering the service — it’s about providing a product that makes life easier for the client at a price they can afford.

“The irony in the tax marketplace is that legislators add tax incentives with good intentions, but it’s often only large companies with capital that can actually take advantage of them,” said Justin Smith, Brand & Creative Strategist at Arvo. “We can efficiently deliver our solutions to the SMBs that make up most of the market share of companies who are affected by this.”

Tech-forward service providers are more affordable than hiring a big-name accounting firm, and by leveraging integrations and automation (sometimes driven by AI), they can collect documentation and calculate eligible expenses without asking the client to send data manually. 

Integrations and the automation they enable dramatically improve the value of the product in three ways:

1. User Experience — They improve the user experience through simplified onboarding flows and less manual work for the client
2. Scalability — They allow service providers to scale operations and revenue without proportionally increasing headcount
3. Enhanced Security — They allow data to flow through secure channels that use encryption, multi-factor authentication, and role-based access controls to protect sensitive information.

Arvo uses Finch’s payroll integrations for R&D tax credits to integrate with their clients’ payroll systems and pull real-time employee and pay data. 

“Finch moves data instantly and accurately at scale so we don't have to do it manually,” Ken explained. “Having a proven, instant, easy platform that syncs data for us — that's a huge time-saver, and more importantly, it creates accurate data for us.”

Why payroll integration for R&D tax credits is mission-critical

AI and automation depend on reliable access to client data, which is where integrations come into play. 

As a tax credit service provider, you need access to data about both the research and development projects (for documentation) and their associated expenses (to calculate the total credit amount). Given that people costs are the biggest expense most companies have, payroll systems are one of the most important integrations you can offer your clients. 

“We’ve seen that employee wages are usually the largest contributor to qualified R&D expenses,” said Keli Dennehy, Senior Manager at Neo.Tax, an R&D credit services platform. “Businesses get $10 back for every $100 spent on R&D, so you can kind of look at it as ‘Hire 10 engineers, get one free.’”

Neo.Tax uses Finch to expand support for their own payroll integrations, which has been especially critical as they move upmarket to work with larger clients.

“We’ve taken great advantage of the ability to support many payroll providers,” said Forrest Brown, Product Lead at Neo.Tax. “It’s key in this market that you have a big variety. Over the last two years, we’ve shifted our focus from early-stage companies to midmarket and enterprises — so we’ve taken advantage of Finch to support a range of providers.”

Scaling R&D tax credit platforms through payroll and HRIS connectivity

The largest share of R&D tax credit-eligible expenses comes from employee wages, making payroll integrations a priority for your platform.

The challenge with payroll integrations is the size of the market: there are more than 600 payroll software platforms in the US alone. Building and maintaining connections with each is practically impossible; but by using a unified provider like Finch, businesses like Neo.Tax and Arvo have unlocked access to 250+ HRIS and payroll systems with a single integration.

Learn more about how Finch supports tax credit service providers, or schedule a call with our Sales team.