Are you a business owner that is unhappy with your recent tax bill? If you have not explored it yet, the Research and Development (R&D) tax credit can provide significant benefits to your business’ bottom line. Chances are you could be missing out on a dollar-for-dollar reduction in your federal and state income tax liability.
Whether you’ve already filed your return or extended, the R&D credit is a powerful tool to help lower effective tax rates. Even startups or small businesses that have no income tax liability can make use of the credit by applying up to $250,000 in federal R&D tax credits towards their payroll tax liability.
The Potential Benefits of the R&D Credit
There are several benefits to realizing the R&D tax credit. These benefits can include the following:
- Up to 15 cents of credit for every qualified dollar spent on R&D
- Dollar-for-dollar reduction in your federal and state income tax liability
- Increased in earnings-per-share
- Reduction of your effective tax rate
- Improved cash flow
- Unused credits can be carried forward up to 20 years
- Recent regulatory developments make claiming the R&D tax credit for companies much more feasible
- Look back studies can recognize unclaimed credits for open tax years (generally 3 or 4 years)
Taxpayers should act now to maximize the tax benefits for R&D activities. Don’t let valuable credits go unclaimed.
Need More Information?
There are several resources on our website to help you learn more about the R&D tax credit.
Check out our:
- Free R&D Webinars
- Free calculators to estimate R&D tax credit benefits
- R&D Case study
- Recent Tax Insights for the latest R&D tax credit related news
If you are uncertain as to whether you qualify for the R&D tax credit, we recommend working with a professional. Our team of highly trained engineers and specialists are well-versed in this area and can help you maximize your R&D tax credit.