Tax credit to promote innovation

The R&D Tax Credit is a federal tax incentive (also available in many states) designed to promote innovation. It allows companies to receive tax credits for expenses incurred for research and development, thereby lowering their tax obligation and increasing funds for future innovation.

Most qualifying expenditures result from the wages paid to employees that participate in qualifying activities. As a result, the potential for R&D tax credits can be substantial. If your company has been engaged in qualifying activities for the last several years, you may be eligible to retroactively claim R&D tax credits.

Benefits you’ll love

There are several benefits to realizing the R&D tax credit. These benefits can include the following:

Dollar-for-dollar reduction in your federal and state income tax liability

Increased in earnings-per-share

Improved cash flow

Credit carried forward up to 20 years

Look back studies can recognize unclaimed credits for open tax years

And More

up to 20 years


Projects that might qualify for relief

Primarily a labor based incentive, the R&D Tax Credit applies to activities undertaken to develop new, improved and more reliable products, processes and formulas such as:

  • Developing or testing new products or materials
  • Developing new or enhanced formulations
  • Testing new concepts Improving existing products Trial and error experimentation
  • Designing tools, jigs, molds and dies
  • Design and analysis of prototypes or models
  • Developing or improving production or manufacturing processes
  • Developing, implementing or upgrading systems/software
  • Paying outside consultants/contractors to perform any of these activities

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