RESEARCH & DEVELOPMENT TAX CREDIT

Are you getting the appropriate R&D tax credits for your business?

What is the Research & Development Tax Credit?
R&D tax credit is an incentive that rewards taxpayers for conducting research in the United States. Its goal is to promote and incentivize innovation by allowing tax credits for their research expenditures. It is for the businesses of all sizes not just research labs and larger corporations.

Substantiating research activities, documenting research expenses, and computing research tax credits in a way that meets the stringent audit requirements of the IRS and state tax authorities isn’t easy. As a result, we find many taxpayers don’t receive the R&D tax credit they deserve.

BENEFITS:

  • Reduction in federal & state income tax liability
  • Immediate cash flow.
  • Tax credit carried forward up to 20 years.
  • Unclaimed credit for open tax years, generally last three to four years.
QUALIFIED EXPENSES

  • Salaries paid to employees and supervisors involved in the research.
  • Payments made to US-based contractors assisting in the qualified research.
  • Supplies used and consumed in the R&D process.
QUALIFYING RESEARCH ACTIVITIES MUST MEET THE “FOUR-PART TEST”:

INDUSTRIES THAT BENEFIT

Aerospace and Defense
Manufacturing and Consumer Prodiucts

Apparel
Medical Devices and Instrumentation
Automotive
Pharmaceutical and Biotechnology
Clean Technology
Professional Services
Construction
Technology (Software and Hardware)
Energy and Environmental Services
Telecommunication
Entertainment

Wineries and Vineyards
Food and Beverage

Start Up Benefit:

In 2015, PATH Act modified the R&D Tax Credit to benefit startups and mid-sized businesses.
The Act also included the R&D Tax Credit to offset employer portion of FICA Taxes up to $250k per year for startups with less than $5m gross receipts.

Resources From Astue Blog

R&D Tax Credit isn't Restricted To Research Labs-Your Business May Be Eligible, too!
Everything You Need To Know About R&D Tax Credits.

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