Innovation keeps businesses moving forward. The businesses of the future don’t simply adopt the status quo, but instead look for ways to expand what they’ve done and create new ideas. As your business works to improve existing products and services and develop new ideas, know that there is a tax benefit to these types of activities that could help you improve cash flow.
Depending upon the nature and timing of these organizational investments, you may be eligible for the research and development tax credit.
We take the time to understand your organization so you can take full advantage of qualifying credits. Our clients feel peace of mind knowing that we bring a thorough knowledge of tax laws and regulations to every interaction with them.
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Realize the impact the research and development tax credit can make.
Turning Innovation Into Savings
Eide Bailly’s R&D tax specialists help take the confusion out of qualifying for the credit. But the work doesn’t stop once you know you qualify. Our team can help you take full advantage of qualifying credits for your activities.
Recently we help a manufacturing company (specifically, industrial and agricultural material handling equipment) was working on a new product design, as well as enhancement and overall process improvements. The result? $265,000 - $450,000 combined federal/state credits each year.
How does the R&D tax credit work?
The R&D tax credit incentivizes businesses to undertake specific types of research and development related activities, including:
The R&D tax credit was permanently extended in January 2015. There is potential that funding from the credit can be retroactively applied.
What types of organizations typically receive the research and development tax credit?
The R&D tax credit has no specific industry requirements when it comes to utilizing the credit. The application of the credit lies more with the types of activities a particular organization is participating in.
Industries where we have seen the R&D tax credit make an impact include:
Additional state credits may apply
No state credit available
Supplies include any tangible property used in R&D, i.e. prototype units (even if eventually sold), experimental fixtures and tooling, and samples used for field testing. Exclude equipment being depreciated.
Contractors must be performing research (i.e. design, prototyping, testing, etc.) on behalf of the taxpayer, and must be paid even if the research is unsuccessful to qualify.
Federal credits may be available up to:
This tool is for general information purposes and does not take in to account the complexities of law and factual circumstances that could affect qualification for the credit. Claiming the credit requires a thorough, in-depth analysis of specific issues.
How do I take advantage of the research and development tax credit?
In order to qualify for the research and development tax credit, organizations must pass a four-part test.
Choosing the Right Firm to Help with Your R&D Tax Credits
The potential of the credit is immense. The confusion surrounding if your activities qualify can be crippling. Working alongside a trained professional who specializes in these tax credits can help. Not only can your CPA help identify if you qualify for the credit, but they can also help you gain maximum benefit from the R&D credit.
Eide Bailly’s research and development tax credit team takes the time to understand your organization’s situation and how you can take full advantage of qualifying for the credits. Our team brings thorough knowledge of tax laws and regulations in finding tax credits and helping our clients qualify and receive the benefit.
The Impact of R&D Tax Credits
How much will you save?
Turn Your Innovation into Tax Savings
Take the confusion out of knowing if you qualify for the research and development tax credit. Instead, work with a trusted CPA firm with a proven track record of helping clients utilize the R&D credit.
Get rewarded for your innovation and increase your cash flow.