Research & Development Tax Credit Study
How to qualify for the R&D tax credit
The R&D tax credit (officially called “Credit for Increasing Research Activities”) was established to incentivize and reward innovation in the United States. This credit is a dollar-for-dollar reduction to your tax liability and can amount to over 10% of every qualified dollar. Despite the broad definition of R&D provided by the IRS, companies miss out on millions of dollars each year by assuming the credit is reserved for pharmaceutical companies and Fortune 500 brands with dedicated research scientists. This is absolutely not true, and there is a good chance your company can qualify.
Calvetti Ferguson has helped companies from a variety of industries capture this lucrative tax credit. Industries we have experience working with include agriculture, architecture, engineering, food and beverage, manufacturing, MEP contractors, oil and gas, and software.
How can you qualify?
First and foremost, a portion of your activities must meet the following four-part test:
- Technological in nature: Activities must be based on sciences including physics, biology, engineering, and computer science.
- Permitted purpose: Activities must improve the functionality, performance, reliability or quality of a new or existing business component, like a product, process or formula.
- Eliminate uncertainty: Activities must be undertaken to discover information intended to eliminate uncertainty concerning the design, methodology, or capability of developing the intended business component.
- Experimentation: All activities must show an evaluation of alternatives through simulation, modeling or systematic trial and error.
Working closely with your CPAs, our R&D tax consultants will assist you in identifying and capturing Federal and State R&D tax credits that can drastically reduce your tax liability. Not only can we review your current tax year, but the R&D tax credit can be taken for all open years, providing a refund on amended returns and instant tax relief on your current year. If a credit cannot be used in the year it is identified, it can be carried forward up to 20 years.
Calvetti Ferguson works with mid-market companies, private equity firms, and high net worth individuals across the country. Regardless of the complexity of the compliance, assurance, advisory or accounting need, our team stands ready to assist you. Please complete the form below, and we will follow up with you shortly.