R&D Tax Credit Basics

Introduction

      Since its adoption in 1981, the R&D (formally, the Research & Experimentation) Tax Credit has been one of the most significant resources used by companies, in a wide range of different industries, to maximize their bottom line. Initially designed to promote domestic innovation and R&D investment, the credit has evolved constantly during its lifetime. According to the advocacy group, the R&D Credit Coalition, only 17,700 public and private companies have claimed this dollar-for-dollar credit totaling $6.6 billion dollars. The large majority (over 65%), of eligible companies overlook or fail to take full advantage of this tremendous opportunity.

Benefits

      The Research and Development (R&D) Tax Credit is one of the most substantial incentives under current U.S. tax law because, unlike a standard deduction, it is a dollar-for-dollar credit against your tax liability. Depending on your company's qualified research expenses, the credit can include eligible wages, supplies, and outside contractor expenses. Also, this federal tax incentive is available in over 30 states. Lastly, the R&D Tax Credit is available for all open tax returns, which usually includes up to 3 previous years and the current tax year. In the case of insufficient lax liability, firms may have the option to carry the credit forward 20 years.

Qualifications

      The common misconception about the Research and Development (R&D) Tax Credit is solely for traditional white lab-coat activities and manufacturers. Recent legislation has broadened the industries and companies that qualify for the credit. Common R&D eligible activities include:

The essential criteria for Qualified Research Expenses are summarized in the Four Part Test:

Elimination of Uncertainty

Technical in Nature Permitted Purpose Process of Experimentation

Industries

      Despite the tremendous tax incentive, most eligible companies are unaware or fail to take full advantage of the generous R&D tax credit. Companies, large and small, in a broad range of industries, often overlook research expenses in their field, due to misconceptions about common activities that qualify. Our experts understand the R&D Tax Credit is not limited to traditional white lab-coat activities or manufacturing, and can use our streamlined process to extract the full potential of your company's R&D. If your company is involved in any type of research, development, or improvement of new or existing products, processes, formulations, or software your company likely qualifies, and R&D Tax Savers can help you quantify and defend your R&D tax credit.

Case Studies

      Our goal at R&D Tax Savers is to pursue the tremendous tax incentives for any company that invests in the development of new or improved products, processes, and services. Our experts have captured millions of dollars of tax savings in many different industries, from biotech startups and medical manufactures to architecture and engineering firms. Our streamlined turnkey process not only maximizes your financial benefits now, but also encourages procedures to promote simpler and stronger tax credit claims for the future.


Medical Manufacturing
Food Processor
Architecture / Engineering
Biotech Start-Up

Process

      At R&D Tax Savers, our specialists include attorneys, accountants, engineers, and IRS enrolled agents that provide unparalleled expertise in order to substantiate the maximum R&D credit for your company and ensure its defense. We perform complimentary assessments of your innovative activities to demonstrate the potential credits, present and past. Our streamlined turnkey process explores the fundamental R&D activities of your business on a project by project basis, which will optimize your savings with minimal time investment from your employees. Lastly, our focus on the quantitative and qualitative aspects of your R&D will improve your company's internal procedures, resulting in simpler stronger R&D claims in the future.

R&D Tax Credit Encyclopedia

      As part of our own research and development, we are continuously following the latest R&D Tax Credit developments in legislation and case law, in order to provide our clients with the most comprehensive information through our published articles, online encyclopedia, and blog. Our experts understand the importance of knowledge, collaboration, and most importantly sharing so we strive to get the most up to date information and convey it to our clients in a simpler more comprehensible way.