Energy City Brewing

Energy City Brewing uses Gusto to get $53,000 in tax credits to innovate in a tough economy

Gusto’s experts in federal research and development tax credits found undiscovered expenses that qualified for the credit. Plus, they managed the application process from end to end.

See if you qualify for R&D tax credits

With Gusto, Energy City:

Money Envelope Kale

Unlocked $53,000 in tax credits to stay competitive in a tough economy

Piggybank Ginger

Discovered qualifying expenses they didn’t know were eligible for the credit

Watch Guava

Avoided the time and expense of staying current on complex tax credit rules

About Energy City

Where: Batavia, IL
Industry: Food and Beverage (Brewing)
Employees: About 9
Joined Gusto: April 2018

Energy City is a brewery and taproom based in Batavia, Illinois. Founded 5 years ago by husband and wife duo David and Heidi Files, Energy City distributes beer across 20 states and in Europe, Asia, and Australia. David, a former chemical engineer, brings his experimental approach to the art of craft brewing, creating new beers every month for Energy City’s adventurous customers.  

Energy City began working with Gusto in 2018, after their accountant made a recommendation. Since then, Gusto has supported their business in diverse ways, including automating payroll and tax compliance, providing assistance by HR pros, onboarding and offboarding employees, and managing team members’ 401(k). 

Recently, Energy City engaged Gusto’s experts to secure $53,000 in federal research and development tax credits. Here’s how it happened.

Gusto helps Energy City power through challenging times

$53,000 in tax ‘life-saving’ tax credits

For David and Heidi Files, brewing beer is a passion project that matured into a successful business with international reach – thanks to innovative products, a base of die-hard fans, and a love for the brewer’s craft that just won’t quit. 

“Brewing beer is like going out into the woods and exploring,” David says. “Sometimes you go down a trail, and it leads to a dead end. But sometimes it leads to a beautiful vista. I’m always looking for those vistas.” 

Like many businesses, Energy City faced major economic challenges in 2021. But they pulled through with hard work and a smart decision that unlocked critical amounts of working capital: using Gusto’s R&D Tax Credit Service to earn $53,000 in federal research and development tax credits.   

“It was a really tough year,” Heidi explains. “The economy, trends, and even the world changed so quickly. The tax credit allowed us to preserve important cash reserves and maintain operations. What it meant was, we didn’t have a huge tax bill at the end of the year. It was life changing. It saved the company this year, for sure.”

With more cash on hand, Energy City could focus on what it does best – taking their craft to the next level, and continuing their commitment to developing a new beer every month.  

“We did a lot of experimenting, and it really helped,” says Heidi. 

David adds: “I love the chemistry, the measurements, the pH, the specific gravity, the oxygen concentration. That shows in the quality of our product. One of the things that sets us apart is the ability to make a new beer every month. We can, on a whim, come up with a new idea, and within 3-4 weeks, have a new beer out for production.”

What’s David’s favorite beer to date? “The one I haven’t made yet,” he says.

Finding undiscovered credits with peace of mind

Heidi turned to Gusto’s tax experts because of her confidence in Gusto and her accountant’s recommendation.

Our accountant warned us that other tax credit services sometimes overestimate their clients’ tax credits, which could trigger an audit. I already trust Gusto 100 percent. So that made it an easy choice for R&D tax credits. Gusto’s accuracy and expertise are going to protect us.
Co-Founder, Energy City

At the same time, Gusto experts found research expenses at Energy City that Heidi hadn’t realized were eligible for tax credits, like qualified wages. 

All in all, Gusto’s thorough but cautious approach gives Heidi peace of mind. “Gusto has our best interest in mind, striking a balance between being efficient but not overreaching,” Heidi says.

Gusto experts maximize time and cost savings

Another reason Heidi asked Gusto for tax credit help? Gusto’s experts already understood the changing compliance landscape of R&D tax credits, so she didn’t have to research the rules herself or pay her accountant to get up to speed. 

“Our accountant had helped us with R&D tax credits in the past, but there were some new documentation requirements that I wasn’t familiar with, and our accountant recommended we use Gusto,” Heidi says. “Because we’re not experts in R&D tax credits, Gusto saved us a lot of time by doing the legal work and having the experts on hand. Gusto just removed any headache.”

The fact that Gusto’s tax credit service is integrated into its all-in-one payroll platform is another time-saving opportunity, she adds. Gusto will automatically apply the tax credits to reduce ongoing payroll tax liability – a service that’s free when Gusto does the tax credit work, but costs $1,200 per year when customers use a third-party tax credit service.* 

Time-saving advice from experts, along with an easy-to-use platform, were the original reasons why Energy City chose Gusto in 2018, when they were first starting out. 

 “Back then, I didn’t know all the rules and regulations, and I didn’t have money to hire an HR person,” Heidi says. “With Gusto, I know all the taxes are being paid, and I don’t have to do all the calculations. I feel protected by having Gusto be the HR department for our small business. Also, it’s so easy to find information that we need. It’s just an absolute no brainer.”

Do you qualify for
an R&D tax credit?