Research and Development Tax CreditsThe R&D Tax Credit, first enacted in 1981, has been one of the most valuable credits leveraged by companies. Every year, the R&D credit yields billions of dollars in federal and state benefits to companies engaged in qualifying research. Thousands of companies take advantage of the credit across several industries. Some of the common industries that qualify for the R&D tax credit include, but are not limited to:
The Potential Benefits of the R&D Tax CreditThere are several benefits to realizing the R&D tax credit.
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Find out if you qualify for the R&D Tax Credit
Can you or your clients claim the R&D Credit? Please fill out our proposal request form and one of our R&D experts will contact you. Thank you. |
State R&D Tax BenefitsMany states offer the R&D tax credit which generally follows the federal regulations and IRS guidance on what constitutes Qualified Research expenditures (QREs). However, there are some states that are an exception to the federal guidelines, such as Connecticut and California. For example, Connecticut has a lower threshold defining expenditures under Section 174 which allows a greater amount of expenditures to qualify as for the R&D tax credit. California utilizes a different definition of gross receipts and only includes sales of real, tangible, or intangible property held for sale to customers in the ordinary course of the taxpayer’s trade or business delivered or shipped to a purchaser within California and does not include service-related receipts, rents or interest.
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Qualifying ActivitiesOne of the common misconceptions surrounding the R&D tax credit is that participants must wear lab coats and use test tubes in order to qualify for the credit. This couldn’t be further from the truth. In reality, the definition of research and development for tax credit purposes is fairly broad. Companies are able to qualify activities beginning with the development of concepts and extend to the point where a product, process, formula, or other business component is ready to be commercially released. If a company is engaged in any of the activities below, looking into a potential R&D credit may be a fruitful exercise. Companies engaged in the following activities should consider looking into the R&D tax credit:
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Qualifying ExpendituresQualifying expenditures include:
Case StudyGreen inc developed a new line of cookware using a new material that works like normal cookware and is biodegradable, so it causes no pollution when disposed of at the end of its useful life. Results: Qualified cost included employee wages, contractors and supplies used to build prototypes. The current federal year tax credit is up to $30,000. » View the full Case Study |
Meet the R&D ExpertsWith years of knowledge and experience, our experts will guide you every step of the way from the initial R&D process to securing the R&D Tax Credits. We will maximize and sustain your tax credit while reducing time and cost spent capturing information.      |
Recent R&D Tax Credit News
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The KBKG AdvantageCompanies have options when selecting an R&D tax credit consultant. Our approach to the research credit is the same consistent approach we use with our other services. We are a client centric firm with a primary objective of delivering value to our clients. We are a collection of former Big 4 accountants, and engineers with decades of experience providing R&D tax credit expertise to clients of all sizes. Our experience with the R&D tax credit and the taxing authorities have allowed us to create a strong deliverable aimed at providing you peace of mind. Some of the other factors that are key to KBKG’s position in the market include: Free Audit Support: In the event of an examination of our report by any taxing authority, we will provide audit support at no additional charge through the IRS Field Agent level for issues directly related to our report and services. Our Approach: KBKG does not employ a “canned” approach to research credit studies. We understand that all companies and accounting systems are different. As such, prior to beginning a study, we review your Company’s available information and structure and tailor our studies to the information available. Quality Assurance: Our methodical documentation procedures will minimize any time required in the event of a revenue agent’s examination. In addition to our deliverable providing a full audit trail, our work papers are organized, indexed and secured. We’ve designed our deliverables and work papers to address many of the questions commonly asked during audit. |
Webinar EducationAs educators in the field of tax credits, incentives and deductions, we hold numerous seminars and webinars for CPAs, attorneys, investment firms, and other real estate professionals. To learn more about the R&D tax credit, please attend one of our complimentary R&D webinars and get 1 full CPE credit. The course will cover the fundamentals of the R&D Tax Credit, including the history and recent developments, project qualifications, calculating the benefits, the chronology of a typical project and common issues. Webinar Details: |
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