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The Opportunity

The R&D tax credit is a federal incentive for companies that develop or improve their products or processes within the U.S. Many businesses engage in qualifying activities as a regular part of business operations, including requirements definition, design, prototyping, testing, and other aspects of the product development lifecycle. Businesses can receive back around 10% of those costs in federal credits, and may benefit from state-level R&D credits as well.

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The Opportunity

The R&D tax credit is a federal incentive for companies that develop or improve their products or processes within the U.S. Many businesses engage in qualifying activities as a regular part of business operations, including requirements definition, design, prototyping, testing, and other aspects of the product development lifecycle. Businesses can receive back around 10% of those costs in federal credits, and may benefit from state-level R&D credits as well.

Does My Business Qualify for the Credit?

Businesses in any industry can qualify for the credit. The credit is not based on how technologically advanced a particular product is, but on the purpose and approach behind the product development or improvement. In addition to incurring the costs within the U.S., taxpayers have to meet a four-part test to benefit:

  1. Technological in nature. The R&D credit only applies to activities based on 'hard sciences', such as computer science, engineering, physics, biology, chemistry, etc.
  2. Qualified Purpose. The activities and costs must relate to developing or improving a product or process for use in the taxpayer's business.
  3. Technical Uncertainty. Prior to the development activity, the business must be uncertain about the feasibility, design, or methodology of the new or improved product.
  4. Process of Experimentation. To resolve uncertainty, the business must rely on an iterative, trial-and-error process. That may include analysis of alternatives and testing of designs or prototypes.
Medical research team

Does My Business Qualify for the Credit?

Businesses in any industry can qualify for the credit. The credit is not based on how technologically advanced a particular product is, but on the purpose and approach behind the product development or improvement. In addition to incurring the costs within the U.S., taxpayers have to meet a four-part test to benefit:

  1. Technological in nature. The R&D credit only applies to activities based on 'hard sciences', such as computer science, engineering, physics, biology, chemistry, etc.
  2. Qualified Purpose. The activities and costs must relate to developing or improving a product or process for use in the taxpayer's business.
  3. Technical Uncertainty. Prior to the development activity, the business must be uncertain about the feasibility, design, or methodology of the new or improved product.
  4. Process of Experimentation. To resolve uncertainty, the business must rely on an iterative, trial-and-error process. That may include analysis of alternatives and testing of designs or prototypes.
Medical research team

See How R&D Credits Can Benefit You

Find out how to maximize your research and development (R&D) credit benefits. Our process is focused on transparency, client service, and deep technical expertise.
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Step 1: Request Complimentary Analysis

Get a free initial consultation to discuss your business's ambitions. After the call, we will request some limited additional information to help us refine your estimated credit benefits. This step usually takes 1-2 hours of your time. 

Step 2: Receive Proposed Scope of Work

After we evaluate the information gathered, we develop an estimated benefit and lay out the R&D study methodology that will best suit your business, along with the associated timeline and fees.

Step 3: Claim Your Credits

Once the full scope of work is agreed to, we request additional information and conduct interviews in order to determine the final amount of R&D costs under section 174 for the R&D credit. We create a detailed deliverable to support the results, including substantiation for the activities included as R&D.

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How Strategic Tax Planning Can Help Your Business

Our process is focused on transparency, client service, and deep technical expertise to maximize your R&D credit benefit. Here's how it works:

Step 1 - Free Consultation. We start with a 30-minute conversation to discuss your business and learn more about your development activities and costs. After the call, we will request some limited additional information to help us refine your estimated credit benefit. This step usually takes 1-2 hours of your time. 

Get started by using our online Estimator tool [link], calling us at (202) 455-6010, or filling out this contact form.

Step 2 - Estimate and Proposed Scope of Work. After we evaluate the information gathered, we develop an estimated benefit and lay out the R&D study methodology that will best suit your business, along with the associated timeline and fees.

Step 3 - Once the full scope of work is agreed to, we request additional information and conduct interviews in order to determine the final amount of R&D costs under section 174 and for the R&D credit. We create a detailed deliverable to support the results, including substantiation for the activities included as R&D.  

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FAQs

Unclear about our service? Dive into our FAQs for clarity and keep the questions coming.

What costs are eligible for the R&D credit?

U.S. employee taxable compensation, 65% of third-party contractors in the U.S., supplies/materials, and cloud computing.

What business activities are included as “research”?

Development of new or improved products and technical processes.

What industries have significant R&D activities?

Software development, IT, manufacturing, pharma, agriculture, engineering, construction, e-commerce, and more.

View Insights From Our Team

Explore our curated list of downloadable PDFs and other resources for more information. 

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