R&D Tax Credit-Your incentive for Innovation
Each year the U.S. government gives billions of dollars in R&D tax credits, yet many companies are leaving this money on the table. Let us help!
We'll help you determine your eligibility, document your processes, and maximize your return!
What is the R&D Tax Credit
The Research and Development (R&D) tax credit is a government incentive designed to reward U.S. companies for investing in innovation. They are a valuable source of cash for businesses to invest in accelerating their R&D, hiring new staff and ultimately growing.
The R&D tax credit is for businesses of all sizes. Companies from various industries can qualify for this government-sponsored tax benefit just by performing their day-to-day activities.
The R&D tax credit is for businesses of all sizes. Companies from various industries can qualify for this government-sponsored tax benefit just by performing their day-to-day activities.
How does the R&D Tax Credit Work?
Companies that spend money developing new products, processes, or services, or enhancing existing ones, are eligible for R&D tax relief. If you're spending money on your innovation, you can make an R&D tax credit claim to receive either a cash payment or a corporate tax reduction. The scope for identifying R&D is huge – in fact, it exists in every single sector. And if you're making a claim for the first time, you can typically claim R&D tax relief for your last two completed accounting periods.
What Qualifies as R&D?
Many businesses are still unaware that R&D credit eligibility extends beyond product development to include activities and even operations such as the latest manufacturing methods, software development, and quality improvements. Even start-ups may be able to utilize the R&D tax credit against their payroll tax for up to 5 years. The Section 41 four-part test defines activities that qualify for the R&D tax credit:
