R&D Tax Credit
The U.S. Research and Development (R&D) Tax Credit is a tax incentive for businesses that undergo research activities to create or improve their products, processes, or software. R&D was introduced as an incentive for businesses to take risks, and to boost innovation for companies that do business in the United States.
Many companies have failed to take advantage of this lucrative tax credit in the past simply because they weren’t aware that they qualified. Due to a 2016 provision, more companies than ever, including startups and small businesses, are able to benefit from the R&D tax credit.
In order to benefit from R&D, all research activities performed by qualifying companies must be thoroughly documented. Our team of in-house engineers and tax-saving experts will create the documentation needed. We are also equipped to assist businesses in identifying previously unrecognized areas that they can benefit from.
Understanding If You Qualify for R&D
Despite the previous notion that R&D tax credits are only applicable to companies in the high-tech, biotech, and pharmaceutical industries, the credit is available to any business that performs qualifying research activities.
Although a wide variety of businesses qualify, less than 1/3 of companies utilize the tax credit, and those who do, often do not reap the maximum amount of credits that they’re entitled to.
Startup companies can also cash in on this money-saving credit. A startup making less than $5 Million in annual gross and performing qualifying research can benefit by offsetting up to $250,000 against their payroll tax liabilities.
National Tax Group’s in-house tax-experts and engineers are here to assist companies of all sizes and industries obtain R&D credits by providing solid documentation that will withstand any level of IRS and state authority scrutiny.
Our Step-By-Step Process
- Perform an assessment in order to thoroughly understand how your company develops products, processes, or software
- Prepare detailed written R&D claims that will also benefit future claims
- Perform a feasibility analysis to calculate the actual cost of research and development
- Provide assistance with tax form and return preparation
- Document the eligible costs and activities
- Build procedures to identify future credits
- Assist & manage exams and appeals
If your company has already claimed R&D tax credit benefits, you may not have reaped the full benefits. We will review all previously claimed benefits and provide these additional services:
- Calculation review
- Cost review
- Future planning
- Examinations appeal and support
R&D tax credit Four-Part Test
Eligibility for the R&D tax credit depends heavily on research activities passing the 4-Part Test, created by the IRS. Learn more about the 4-Part Test here.
Qualifying Research Activities and Industries
Want to know more about our R&D credit services?
R&D tax credit is not limited to the above industries and activities. Any company performing unique qualified research activities may qualify. Contact us to find out if you qualify for R&D tax credit.