Your business may qualify for R&D tax credits that you haven’t been taking advantage of. Tax law is complex, and many activities that aren’t traditionally research and development-oriented actually qualify for credits at the state and federal level.
R&D tax credit qualified activities
In fact, many of your day-to-day activities may qualify. The R&D tax credit four-part test lays out the basic requirements:
- The activity must relate to a new or improved business component (e.g., product, process, technique, formula, invention or software application)
- The activity involves physical or biological sciences, engineering or computer science in the research process (you may use existing technologies or principles to satisfy this requirement)
- The activity is intended to eliminate technical uncertainty through research (e.g., capability, method or design) related to the development or improvement of the business component
- Substantially all of the activity or activities must relate to a process of experimentation, such as systematic trial and error, modeling or simulation
You can benefit by deducting your research expenditures and claiming the R&D credit.
Identify and maximize your credits
Wipfli’s research and development tax credit team helps your business identify tax savings opportunities so you can lower your tax liability and increase your cash flow. Also called the research and experimentation tax credit (or R&E tax credit), this credit is available both at the federal level and in the majority of states.
Let our team of engineers, technical writers and financial leaders work together to help you maximize your benefits under this valuable credit so that you can continue to reinvest in your business.
Featured Thought Leader
Scott R. Schumacher, CPA, MST
With more than 20 years of experience, Scott is the leader of Wipfli's research and development tax credit team, which works with businesses to claim and substantiate a tax incentive for research and development activities. In addition, he works with closely held and family-owned businesses in the manufacturing and distribution sectors, providing them and their ownership group with tax compliance and planning services.