{"id":196,"date":"2020-06-29T08:16:29","date_gmt":"2020-06-29T08:16:29","guid":{"rendered":"https:\/\/www.thinkastute.com\/blog\/?p=196"},"modified":"2023-11-27T00:00:07","modified_gmt":"2023-11-27T00:00:07","slug":"rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too","status":"publish","type":"post","link":"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/","title":{"rendered":"R&#038;D Tax Credit Isn\u2019t Restricted To Research Labs &#8211; Your Business May Be Eligible, Too!"},"content":{"rendered":"<h4><span style=\"color: #1aa1a1;\">Our research indicates that most small businesses are unaware of an <strong>R&amp;D tax credit<\/strong>. They don\u2019t understand how it can help them earn up to <strong>13.5 cents for every qualified dollar<\/strong>!<\/span><\/h4>\n<p>Due to a lack of information surrounding this unique tax credit, it is easy to assume that the credit is only meant for research labs or large corporations. This is a myth &#8211; thanks to the <strong>PATH Act of 2015<\/strong>, a wide variety of SMEs and start-ups can also reap the benefits of this tax credit if they have invested in designing or developing <strong>processes<\/strong>, <strong>services<\/strong>, <strong>software,<\/strong> or <strong>products<\/strong> in science or technology. For example, a furniture manufacturer might not be traditionally viewed as a research-based company, and yet the unique design process they use to manufacture their products makes them qualified for the R&amp;D tax credit. It is also important to be aware that your company\u2019s investment in R&amp;D activities do not have to be successful &#8211; the <strong>effort is rewarded irrespective of the outcome!<\/strong><\/p>\n<p>&nbsp;<\/p>\n<pre>To find out if your activities are eligible for the R&amp;D tax credit, \r\nplease read our earlier blog post right <a href=\"http:\/\/www.thinkastute.com\/everything-you-need-to-know-about-rd-tax-credits\/\"><strong>here<\/strong><\/a>.<\/pre>\n<p>&nbsp;<\/p>\n<p>The government is ready to provide billions of dollars in R&amp;D tax credit &#8211; both at the<strong> federal<\/strong> and <strong>state<\/strong> level (yes, 40 out of 50 states offer R&amp;D tax credits!). Yet, a substantial amount of this funding remains <strong>untapped<\/strong> year-after-year due to <strong>inaction<\/strong> from companies. Businesses from all industry sectors that invest in some sort of innovation can enjoy R&amp;D tax credit. For example, let\u2019s take a look at how manufacturing companies might not realize the numerous ways in which they may qualify for the R&amp;D tax credit. If they have invested in any of the following activities, they could be eligible for a substantial R&amp;D tax credit &#8211;<\/p>\n<ul>\n<li>Introducing new technologies that improve the manufacturing process (includes specification\/design of prototypes + pilot models)<\/li>\n<li>Designing new algorithms or software architecture<\/li>\n<li>Developing new capabilities and\/or functional enhancements for existing applications<\/li>\n<li>Creating software in which technological challenges pertaining to scale and complexity are present<\/li>\n<li>Developing software applications for either internal use or to interact with customers\/ vendors<\/li>\n<li>Developing new\/improved processes pertaining to quality assurance testing<\/li>\n<li>Developing prototypes using CAD \/ computer-aided manufacturing processes<\/li>\n<li>Developing automated technology\/robotics<\/li>\n<\/ul>\n<p>And many more&#8230;<\/p>\n<h4><span style=\"color: #1aa1a1;\">Similarly, companies across other industries may be unaware of the variety of activities they are already investing in that are eligible for the R&amp;D tax credit. Lack of information causes many business owners to lose a huge tax saving, which is so critical during these trying times!<\/span><\/h4>\n<p><strong>R&amp;D tax credit offers a variety of benefits, including &#8211;<\/strong><\/p>\n<ul>\n<li>Reduced federal &amp; state income tax liability<\/li>\n<li>Improved cash flow<\/li>\n<li>Unclaimed credit for open tax years generally lasts three to four years.<\/li>\n<li>Ability to carry credit ahead for up to 20 years<\/li>\n<\/ul>\n<p><strong>To qualify for the R&amp;D tax credit, businesses must ensure research activities meet the following four-part test &#8211;<\/strong><\/p>\n<ul>\n<li>The research must lend itself to the development of new or improved products or processes<\/li>\n<li>The research must engage the fundamental principles of science and engineering<\/li>\n<li>The research must be conducted with the intention to eliminate technological uncertainties<\/li>\n<li>Lastly, the research must involve experiments<\/li>\n<\/ul>\n<p>Additionally, documentation like lab reports, project lists, project logs, internal emails, patent claims, experiment descriptions, online timesheets, contracts, invoices, form 1099 is required to demonstrate research and qualified expenses, such as &#8211;<\/p>\n<ul>\n<li>Salary for employees conducting and supervisors monitoring R&amp;D activities, only for the percentage of time spent on eligible activities<\/li>\n<li>Cost of supplies and materials related to R&amp;D activities, not including general office supplies and depreciable assets<\/li>\n<li>Payments issued to US-based contractors who are a part of eligible R&amp;D activities\/research<\/li>\n<\/ul>\n<p><strong>The tax filing deadline is approaching.<\/strong> It is time for businesses (across all industries!) to get R&amp;D Tax Credit paperwork ready literally <strong>now<\/strong>. Do not let uncertainty regarding how R&amp;D tax credits are supposed to be calculated prevent you from claiming all the funds you have rightful access to! <strong>Astute<\/strong> has helped many businesses across all major industries claim the R&amp;D tax credit and save millions in tax dollars. We carefully identify all of your company&#8217;s qualified activities, calculate what your tax credit benefit will look like, and put together compelling documentation to validate all of your claims. Enjoy federal and state income tax deductions from an R&amp;D tax credit to improve your <strong>cash flow<\/strong> during these challenging times. For more information, please contact us right <a href=\"http:\/\/www.thinkastute.com\/contact\/\"><strong>here<\/strong><\/a>.<\/p>\n<div><span style=\"color: #757b80; font-family: wf_segoe-ui_normal,Segoe UI,Segoe WP,Tahoma,Arial,sans-serif,serif,EmojiFont; font-size: large;\"><i><span class=\"il\">Sandhya<\/span>\u00a0Mukkamala, CPA<\/i><\/span><\/div>\n<div><a href=\"mailto:sandhya@thinkastute.com\" target=\"_blank\" rel=\"noopener noreferrer\"><span class=\"il\">sandhya<\/span>@thinkastute.com<\/a>\u00a0<b>I<\/b>\u00a0<a href=\"https:\/\/www.thinkastute.com\/\" target=\"_blank\" rel=\"noopener noreferrer\" data-saferedirecturl=\"https:\/\/www.google.com\/url?q=https:\/\/www.thinkastute.com\/&amp;source=gmail&amp;ust=1593539805355000&amp;usg=AFQjCNESBJsTgSszNDcHFSrCDyK_vdRjbQ\">www.<wbr \/>thinkastute.com<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Our research indicates that most small businesses are unaware of an R&amp;D tax credit. They don\u2019t understand how it can help them earn up to 13.5 cents for every qualified&hellip;<\/p>\n","protected":false},"author":2,"featured_media":198,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,5,13,15],"tags":[65,64],"class_list":["post-196","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-rd","category-rd-tax-credit","category-startups","tag-business","tag-rd-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>R&amp;D Tax Credit Isn\u2019t Restricted To Research Labs - Your Business May Be Eligible, Too! - ThinkAstute Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"R&amp;D Tax Credit Isn\u2019t Restricted To Research Labs - Your Business May Be Eligible, Too! - ThinkAstute Blog\" \/>\n<meta property=\"og:description\" content=\"Our research indicates that most small businesses are unaware of an R&amp;D tax credit. They don\u2019t understand how it can help them earn up to 13.5 cents for every qualified&hellip;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/\" \/>\n<meta property=\"og:site_name\" content=\"ThinkAstute Blog\" \/>\n<meta property=\"article:published_time\" content=\"2020-06-29T08:16:29+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-27T00:00:07+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2020\/06\/33.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"851\" \/>\n\t<meta property=\"og:image:height\" content=\"315\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Sandhya Mukkamala\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sandhya Mukkamala\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/\",\"name\":\"R&D Tax Credit Isn\u2019t Restricted To Research Labs - Your Business May Be Eligible, Too! - ThinkAstute Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2020\/06\/33.jpg\",\"datePublished\":\"2020-06-29T08:16:29+00:00\",\"dateModified\":\"2023-11-27T00:00:07+00:00\",\"author\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/6e74ae6bd115c7e6cfba4e1980b9b3ec\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/#primaryimage\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2020\/06\/33.jpg\",\"contentUrl\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2020\/06\/33.jpg\",\"width\":851,\"height\":315},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/rd-tax-credit-isnt-restricted-to-research-labs-your-business-may-be-eligible-too\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.thinkastute.com\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"R&#038;D Tax Credit Isn\u2019t Restricted To Research Labs &#8211; Your Business May Be Eligible, Too!\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#website\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/\",\"name\":\"ThinkAstute Blog\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.thinkastute.com\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/6e74ae6bd115c7e6cfba4e1980b9b3ec\",\"name\":\"Sandhya Mukkamala\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.thinkastute.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2023\/11\/cropped-sandhya-96x96.jpg\",\"contentUrl\":\"https:\/\/www.thinkastute.com\/blog\/wp-content\/uploads\/2023\/11\/cropped-sandhya-96x96.jpg\",\"caption\":\"Sandhya Mukkamala\"},\"description\":\"Sandhya Mukkamala, CPA, Partner and Co-Founder at Astute, advises clients on R &amp;D Tax incentives, strategizing Tax planning, Technical accounting, Forensic Audits, and other corporate compliance related matters. 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