Many business owners today perform research and development activities that may qualify for the research and development credit (R & D credit) and they aren’t even aware of it. Congress passed more liberal R & D credit incentives after 2001 to help US manufacturing be more competitive in the global market.
Even with the more liberal R & D credit regulations, the IRS estimates that only 10% of the companies that qualify for the R & D credit actually receive it. The R & D credit is a cash incentive to help companies, ranging in size from small to large, offset the cost of innovating.
Because of the importance of the R & D credit to our clients, Boge, Wybenga & Bradley, P.C. has become a Titan Armor R&D Tax Credit Software Strategic Partner. By combining Titan’s expertise and software solution with our experience and know how, we can guide you to make sure you receive the full benefit of the potential tax credits pertaining to research and development. The following video will gives you a brief summary of some of the criteria that must be met in order to qualify for the R & D credit.
Any company that develops, designs or improves products, processes, formulas, techniques, inventions and/or software coding, are eligible for the credit. The R & D credit can evolve from engineering, software developers, factory workers, tooling and maintenance workers as well as a variety of other tasks performed in daily business.
The R & D credit takes into consideration federal W-2 wages, supply costs and contracted labor. The credit is a general business credit and is a dollar for dollar reduction in the tax liability of the company. It is also available for flow-through entities such as S-Corporations and Partnerships and would directly reduce the individual taxpayer’s federal tax liability.