
for the R&D Tax Credit
below and one of our R&D Tax Credit experts will contact you.


What is the Research and Development (R&D) Tax Credit?
The R&D Tax Credit (26 U.S. Code §41), also known as the Research and Experimentation (R&E) tax credit, is a federal benefit that provides companies dollar-for-dollar cash savings for performing activities related to the development, design, or improvement of products, processes, formulas, or software. This credit provides much needed cash to hire additional employees, increase R&D, expand facilities, and more. The credit was enacted in 1981 to stimulate innovation and encourage investment in development in the US. Since then, many states have also passed the R&D Tax Credit. As such, this benefit is available across a wide variety of industries. Some of the common industries that qualify include, but are not limited to:
Estimate Your Benefits Instantly
Use our calculators for an estimate of state and federal benefits or to determine if you can offset payroll tax using the R&D tax credit. It's easy to use and free. If at any time you have questions, contact us. We are here to help you realize your maximum tax benefit.
What are the Potential Benefits of the R&D Tax Credit?
There are several benefits to realizing the R&D tax credit. These benefits can include the following:
- Receive up to 12-16 cents of federal and state R&D tax credits for every qualified dollar
- Create a dollar-for-dollar reduction in your federal and state income tax liability
- Increase earnings-per-share
- Reduce your effective tax rate
- Improve cash flow
- Carry forward the credit up to 20 years
- Perform look back studies to recognize unclaimed credits for open tax years (generally 3 or 4 years)
- Utilize the federal R&D tax credit against payroll tax (applicable to certain startup companies)
Four-Part Test
Qualified research activities are defined by the four-part test outlined below
Technological in Nature
Activities must fundamentally rely on the principles of physical or biological science, engineering, or computer science.
Permitted Purpose
Activities must be performed in an attempt to improve the functionality, performance, reliability, or quality of a new or existing business component.
Eliminate Uncertainty
Activities intended to discover information that could eliminate technical uncertainty concerning the development or improvement of a product.
Experimentation
All of the activities must include a process of experimentation including testing, modeling, simulating, systematic trial and error.
Research and Development Tax Insights

Breaking News: Senate Moves to Preserve R&D Expensing & Expand Research Credit
05/09/2022A motion to instruct conferees of the America COMPETES/USICA competitiveness bills by Senator Maggie Hassan (D-NH) was agreed to 90-5 on Wednesday, May 4, 2022. The bill called for preserving R&D expensing, rather than the IRC Section 174 five-year amortization that took effect this year, and an expansion of the R&D tax credit for small … Read More

KBKG to Speak at SCACPA Spring Splash Conference 2022
05/02/2022Our Research and Development Tax Credit Director, Ian Williams, is speaking while Principal, Jonathan Tucker, and Regional Director Chad Niehaus are representing KBKG at the SCACPA Spring Splash Conference 2022. This event takes place from May 12th and May 13th in Spartanburg, SC. Our Southeast team specializes in Cost Segregation, Green Building Tax Incentives (45L … Read More

KBKG Speaking at New York Multifamily Summit 2022
05/02/2022Our Cost Segregation & Fixed Assets Principal, Sumit Sharma, will be speaking at NYMS this year during the Value Add panel discussion. Along with him, Alexis McClellan and Justin Brumfield will represent KBKG. The New York Multifamily Summit will take place on Thursday, May 12th in New York, New York. This event is New York’s … Read More

Webinars For May 2022
05/02/2022Looking for CPE credit? We have several sessions available this month. Click the links below to register. If you have questions or need help registering, please email [email protected] Research & Development Tax Credits 05/03/2022 | 12:00 PM PT | 1 hour | 1 CPE credit This webinar will cover the fundamentals of the Research and … Read More
![[PRESS RELEASE] KBKG Expands Atlanta Footprint with Office in Buckhead [PRESS RELEASE] KBKG Expands Atlanta Footprint with Office in Buckhead](https://www.kbkg.com/wp-content/uploads/KBKG-Tax-Insight-Nebraska-Legislators-Consider-Research-or-Experimental-Expenditures-Fully-Deductible-3-2.jpg)
[PRESS RELEASE] KBKG Expands Atlanta Footprint with Office in Buckhead
04/22/2022After five years in the north Atlanta metro region, the firm has moved operations inside the city’s perimeter to better serve surrounding businesses. Nationwide tax specialty firm KBKG has recently moved its existing Atlanta metro operations from the original Alpharetta location to the heart of Atlanta’s Buckhead business district. The firm’s southeast team has upgraded … Read More

KBKG Tax Insight: Changes in Kansas Research and Development Tax Credit Incentive
04/22/2022Earlier this month, the Kansas University Jayhawks men’s basketball team captured the school’s 6th National NCAA Championship with a 72-69 victory over the North Carolina Tarheels. In one of the most competitive college basketball years to date, Kansas was crowned number 1. Much like college basketball, states compete to attract businesses and innovation to spur … Read More

KBKG Representing at TXCPA Austin Accounting & Finance Leaders Conference 2022
04/07/2022Eddie Price, Matthew Geltz, and Bill Taylor will be representing KBKG at the TXCPA Austin Accounting & Finance Leaders Conference on Thursday, April 21st in Austin, Texas. Our Texas team specializes in Cost Segregation, Green Building Tax Incentives (45L and 179D), Transfer Pricing, and more.. About the TXCPA Austin Accounting & Finance Leaders Conference The … Read More

KBKG Tax Insight: Minnesota Introduces an Alternative Simplified R&D Tax Credit
02/22/2022In an effort to further stimulate the Minnesota economy, state Senator Julia Coleman and House Representative Kristin Robbins introduced S.F. 2970 and H.F. 3316, respectively. Both bills would add a new methodology for taxpayers to utilize in calculating its Minnesota R&D Tax Credit. It is modeled after the federal Alternative Simplified R&D Credit (ASC) methodology. … Read More

Hawaii Senator Jarrett Keohokalole Seeks to Increase Annual Cap for State’s Research Credit
02/08/2022On January 21, 2022, Hawaii State Senator Jarrett Keohokalole introduced Senate Bill (SB) 2599, revising the certification requirements and increasing the annual aggregate cap for the State of Hawaii’s tax credit for research activities (“Hawaii R&D tax credit”). The proposed Section 235-110.91 revisions would first and foremost triple the aggregate cap of research credits available … Read More

KBKG Tax Insight Nebraska Legislators Consider Research or Experimental Expenditures Fully Deductible
01/29/2022Earlier this month, Nebraska State Senator Brett Lindstrom introduced Legislative Bill 827 allowing taxpayers to fully deduct research or experimental (R&E) expenditures in the year in which they were paid or incurred. Beginning January 1, 2022, federal law under IRC Section 174 requires federal taxpayers to charge these expenses to a capital account and amortize … Read More