What Are R&D Tax Credits?

A Research & Development Tax Credit (R&D) is a federal or state sponsored tax incentive that rewards companies for conducting R&D in the United States. Billions of dollars of Research & Development Tax Credits are available to businesses on both the federal and state level for work they have already done.

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How Much is an R&D Tax Credit Worth?

For most companies, the credit is worth 7-10% of qualified research expenses on the federal level. Your state may also provide an additional tax credit which increases your overall benefit.

Which Expenses Qualify towards the R&D Tax Credit Calculation?

US based wages, third party contractors and supplies that were incurred in the development process are eligible for inclusion in the calculation to determine a company’s R&D benefit.

What Types of Activities Qualify for the R&D Tax Credit?

If your business is spending money to create a new product or process or improve upon an existing product or process, then you will likely qualify for an R&D Tax Credit.