When you think of research and development, you probably shrug it off thinking you don’t qualify. After all, it most likely brings to mind pictures of lab coats, test tubes or Petri dishes – but that’s not always the case. Qualified research for the purposes of the federal research and development tax credit is much broader:

  • Aims to create or improve a new or existing business product or process
  • Technological in nature
  • Involves well-reasoned methodology

As you can see, this definition opens up the R&D tax credit qualifications to many more businesses, possibly yours.

Research tax credits can lead to substantial tax and cash flow advantages while reducing potential audit risks. The value could be a reduction in your current tax year liability and effective tax rate. Our specialists focus on how you can receive the biggest benefit from this credit and help put structures in place to track your expenses for future credits.

Who Qualifies for the Federal R&D Tax Credit?

The R&D credit applies to both business products and business processes. It doesn’t matter whether your research was successful or how complex it was. Ask yourself these questions:

  • Are your employees working on complex technical matters with uncertain outcomes?
  • Are they coming up with new ideas, solutions or alternatives?
  • Are they testing their ideas to see which one works best?
  • Do the results improve the quality, reliability or performance of an existing product or process?
  • Would the results create a new effective and efficient product or process?
  • Are these services being done in the United States?

If you answered yes to these questions, you should be taking advantage of the R&D credit.

Questions about the research and development tax credit? Fill out the form to the left to contact Jeremy Smith.