Research and development drive many industries, improving the products we use every day. Many companies dedicate manpower and money toward improving existing products and software or developing new ones to enhance the quality of life. The following will help determine if you qualify for the federal research and development tax credit.
What Is the Credit?
The federal research and development tax credit was developed to match money spent on qualifying processes dollar for dollar. Companies in various industries, including agriculture, automotive, food and beverage, software development, machining, and more, can be eligible for this credit, providing valuable funds they can use to grow their business and help communities.
What Are the Benefits?
Companies qualifying for the federal research and development tax credit can expect numerous benefits. They can receive 12-16 cents for every dollar they spend on research and development and a dollar-for-dollar reduction on their tax liability. They will improve cash flow and reduce the effective tax rate, potentially moving the credit forward as far as 20 years.
Do You Qualify?
A four-part test can indicate whether you qualify for the federal research and development tax credit. Your company must research and develop new products or improve existing products or processes with hard science experiments. It must also be a qualifying purpose that eliminates uncertainty. Experimentation is also required, including modeling, trial and error, simulating, and more.
If you think you may qualify for the federal research and development tax credit, visit the Business Name website to schedule a consultation.
