Startups or large manufacturing companies may qualify for the research and development (R&D) tax credit for expenses paid or incurred in the U.S.
Research and Development (R&D) Tax Credit
The R&D tax credit is the Federal Government’s tax break to foster innovation and technological advancement in areas such as design, product development, processes, techniques, formulas, or internal use computer software or inventions to be sold or used in your trade or business. Since 2015, the PATH Act permanently extended the federal R&D tax credit, thus eliminating the uncertainty in making R&D investment decisions as a tool for lowering your Company’s effective tax rate. Some states also provide that financial incentive, so you keep innovating and stay competitive. However, many companies are unsure if they qualify and do not benefit from the R&D tax credit due to a lack of clear guidance.
The team members at Aimlon CPA and our network of skilled professionals will help you gain clarity on the R&D tax credit purposes. Specifically, we will assist with:
- Identifying which activities qualify as research
- Determining which expenditures qualify for credit
- Applying for credit
- Guiding on which documentation should be prepared to support the research claim
- Advising on how you may use the credit