Research and Development Tax Credits

Claim Tax Credits You Deserve

Reward your day-to-day efforts

 
Did you know research and development (R&D) tax credit programs exist that may reward your day-to-day efforts producing an improved product? Companies that design, develop, or improve products, processes, techniques, formulas, inventions, or software may be eligible for federal and state R&D tax credits. 
 
If you make new, lighter, stronger, cheaper, more reliable products, or to make more precise, more economical and more versatile processes, you have been performing R&D qualifying activities all along. The R&D tax credit is for businesses of all sizes, not just major corporations with research labs, and many companies are surprised that they qualify. 
 
Under recently developed government regulations, more industries qualify than in the past. You may file amended tax returns to obtain refunds of previously paid income taxes, and in some cases, may be able to recapture taxes paid up to four years ago.
 

Reward your improvement efforts

In addition to qualified wages, companies may capture supply costs for prototypes, as well as 65 percent of contracted labor spent performing qualified research on behalf of the company. Furthermore, over 35 states have an R&D tax credit program as well.
 
Companies can benefit by both deducting the research expenditures and by claiming the credit. While the research expenditures are a reduction of taxable income, the R&D tax credit is a general business credit and a dollar-for-dollar reduction of tax.
 
More than $5 billion in federal R&D tax credit benefits are given out annually. Explore the many benefits of R&D tax credits:
 
- A hidden and immediate source of cash for many small and mid-size companies.
- Creates a significant reduction to current and future years federal and state tax liabilities.
- The R&D tax credit is not a deduction; it is an actual dollar-for-dollar credit against taxes owed or taxes paid. Additionally, the taxpayer may be able to expense all such qualifying R&D costs in the year incurred.
- More than $7.5 billion in federal R&D tax credit benefits alone are given out annually.
- Approximately 80 percent goes to a few of the nation’s largest companies.
- Every successful company is potentially eligible for an R&D tax credit of some amount.
- A business can take the credit for all open tax years, generally the last three or four years plus the current year.
- Additional years may be available if a taxpayer is in a net operating loss or alternative minimum tax position.
- Tax credits may carry forward 20 years.
- Recent tax laws are taxpayer-friendly and bring additional benefits.
 
Contact Meaden & Moore here to discuss your needs. We’ll assemble a team especially for you with the tools and expertise you need to meet your expectations and goals in the most responsive and cost-efficient manner.

 

 

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