How to File Your Form 8974: Sequoia One

How to File Your Form 8974 with Sequoia One

Summary:

• The IRS requires that you file Form 8974 the quarter after you file your income tax return with Form 6765 attached.
• If you miss the filing deadline, you will need to amend that quarter’s payroll tax return.
• If you’re filing to claim the R&D payroll tax credit for the previous tax year, the earliest you can process your credit is one quarter after you file your federal income tax return and Form 6765. The deadline to file for any given quarter is 30 days after the end of the quarter. For example, if you’re filing to claim the payroll tax credit for 2021, and you intend on filing your Federal Tax Return in Q1 2022, then the earliest you can process your credit is Q2 2022. To do so, you must file your Form 8974 and Form 941 by 30 days after the end of Q2 2022.
• Sequoia can file Form 8974 on your behalf if you send them a completed CSA Addendum, Form 8974, and a copy of your filed Form 6765.
• Some of the information below is sourced from Sequoia and may not reflect Sequoia’s latest changes.

Steps:

Sequoia can help process the R&D tax credit on your behalf. To file your R&D credit through Sequoia, send the following documents to RDTax@sequoia.com:

• S1 CSA Addendum R&D Tax Credit Processing: You will need to request this document from Sequoia. This document must be signed by an account administrator, and only needs to be signed once — you do not need to sign it every time you file for the R&D tax credit.
• IRS Form 8974: Neo.Tax will help you to create the Header and Part 1 of Form 8974. After filing your income tax return with Form 6765 attached, locate the Form 8974 generated by Neo.Tax, and complete Part 1 columns C and E using information provided in Form 6765. This is all that Sequoia needs. Sequoia will track and roll over remaining credits quarter over quarter, so you don’t need to resend Form 8974 every quarter. However, you will need to resend form 8974 on an annual basis as you become eligible for additional R&D tax credits.
• IRS Form 6765: Send Sequoia a copy of the Form 6765 that you filed with your income tax return. Sequoia will track and roll over remaining credits quarter over quarter, so you don’t need to resend Form 6765 every quarter. However, you will need to resend Form 6765 on an annual basis, as you become eligible for additional R&D tax credits.

Deadline

You must provide this documentation to Sequoia by the 1st of the final month of the quarter in which the credit will first be applied. For example, if you are claiming the credit to offset taxes beginning in Q2 2022 you need to submit these documents by June 1st 2022 to be processed with the quarterly filing done in July.

How you will receive the credit

Sequoia will save a copy of the filed IRS Form 8974 for your reference. The IRS will send the refund directly to Sequoia, and Sequoia will refund you the IRS approved R&D credit amount.