Your day-to-day operations could provide untapped opportunities to access extra cash and reduce your business’ income tax liability, thanks to research and development (R&D) tax credits.
R&D credits regularly deliver savings to businesses that design, develop, or improve products, processes, techniques, formulas, or software—helping put cash back into the business.
Tax refunds can exceed 10% of annual R&D costs for federal credits and even higher when applying state-level credits. Claiming credits can be a complex process that involves intense IRS scrutiny, so it’s crucial to navigate submissions meticulously.
R&D credits are expense-driven—the more you spend on R&D, the more credits you can generate.
Explore some of the ways your business can benefit from your current R&D spending.
R&D credits can be claimed on original tax returns, and the statute of limitations could allow your business to claim credits for previous tax years. Credits can be:
Unused credits are generally carried back or forward to subsequent years. Evaluating your individual tax situation over multiple years is essential for increasing the potential benefit.
Startups can especially benefit from R&D credits because credits can offset payroll taxes.
You may apply the federal R&D tax credit against your payroll tax for up to $250,000 in savings if the following are both true:
Learn more on our R&D Credits: Offset Payroll Tax page.
Many small to midsize businesses can reduce their alternative minimum tax (AMT) thanks to R&D credits.
If your business averaged $50 million or less in gross receipts over the past three years, you may claim the federal R&D tax credit against AMT liability.
Taxing authorities scrutinize R&D credit and deduction claims because the incentives save taxpayers billions of dollars each year.
Confidently respond to any government questions and requests that may arise as we guide you every step of the way. Our professionals have extensive experience in both audit and appeals stages related to R&D tax issues and have successfully defended hundreds of previous claims.
To be eligible for the credit, R&D activities must meet IRS criteria known as the four-part test.
Receive a preliminary estimate of your potential tax savings from R&D by filling out our complimentary benefits estimate request form.
Your engagement team will include professionals from a range of backgrounds—such as CPAs, attorneys, enrolled agents, and engineers—who understand your industry and customize our approach to fit your company’s unique needs.
Explore insights to help determine what credits might be available to your business.
From specific products and equipment to work site and infrastructure, every industry has its own R&D opportunities. Explore common expenses specific to your sector.
Dive deeper into R&D tax credit opportunities for select industries here.
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