RESEARCH AND DEVELOPMENT CREDIT

Have you spent time and money researching and developing your product? If so, you are entitled to a state and Federal credit for investing in your company. The state and Federal governments are incentivizing American companies to invest in R&D by providing a credit of up to 15% at the state level and 20% at the Federal level.

Qualified research is defined as research that has:

• A permitted purpose, i.e. a new or improved process, function, product, quality, performance or reliability.
• Eliminating uncertainty; were the R&D activities intended to eliminate uncertainty concerning the development or improvement of the product.
• Technical in nature, i.e. it must have used the physical sciences such as math, engineering, physical science, et.; and
• Process of Experimentation; did the R&D involve trial and error or repeated testing to remove alternatives.

While at first, these may seem complicated, the truth is that many companies perform qualified R&D, but haven’t taken advantage of the credits. Find out if you are entitled to credits for the investing and developing that you are likely already conducting in your business.