Research & Development Tax Credit

Offset your tax liability with the day to day activities of your business

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WHAT IT IS:
The Research and Development (R&D) Tax Credit is a tax incentive offered to companies who create or improve a product or process in the course of their business.

The R&D credit is a dollar-for-dollar tax savings that directly reduces a company’s tax liability. There’s no limitation on the amount of expenses and credit that can be claimed each year.

If your business doesn’t currently have taxable income, this federal tax credit can be carried forward for 20 years or potentially applied to offset the company’s federal payroll tax.

The R&D tax credit can be used to mitigate alternative minimum tax.

The Research and Development (R&D) Tax Credit is a tax incentive offered to companies who create or improve a product or process in the course of their business.

The Federal R&D tax credit is available to US businesses that develop or improve new products, processes, software, formulas, or business components. Additionally, over 30 states offer R&D credits to offset state tax liability.

The R&D credit originally only applied to a few highly technical companies. When the credit was made permanent by the PATH ACT of 2015, the definition of the credit expanded, allowing a wider range of businesses and industries to qualify for this significant valuable federal tax credit.

Companies that may not consider themselves innovative might be surprised to learn that they may qualify for the R&D Tax Credit.

See If Your Business Qualifies
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Examples of Qualifying Industries:

  • Automobile

  • Architecture & Engineering

  • Aerospace

  • Brewery

  • Chemical & Formula

  • Construction

  • Dental

  • Engineering

  • Fabrication

  • Food & Beverage

  • Hemp

  • Life Science

  • Machining

  • Manufacturing

  • Software Development

STATES OFFERING ADDITIONAL R&D CREDITS

Many states offer additional R&D tax credit benefits, which generally follow the federal regulations and IRS guidance on what constitutes Qualified Research expenditures (QREs). However, some states are an exception to the federal guidelines, such as Connecticut and California.

Not Sure If You Qualify? Our Experts Determine Your Eligibility For Free.

We understand that understanding and applying for the R&D Tax Credit may feel daunting. The important thing to remember is that you won’t be alone. OnCentive tax credit experts will be there with you every step of the way, to walk you through the process and help you prepare all the necessary documentation.

A 15-minute call can qualify your for the largest tax credit for US Businesses

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FAQs

What activities qualify for R&D tax credit?

Qualifying R&D expenses and/or activities are those which pass this four-part test:

Technical uncertainty. The activity is performed to eliminate technical uncertainty about the development or improvement of a product or process, which includes computer software, techniques, formulas, and inventions.

Process of experimentation.The activities include some process of experimentation undertaken to eliminate or resolve a technical uncertainty. This process involves an evaluation of alternative solutions or approaches and is performed through modeling, simulation, systematic trial and error, or other methods.

Technological in nature.The process of experimentation relies on the hard sciences, such as engineering, physics, chemistry, biology, or computer science.

Qualified purpose.The purpose of the activity must be to create a new or improved product or process, including computer software, that results in increased performance, function, reliability, or quality.

How large will my R&D tax credit be?

Unlimited, if applying the R&D credit against income taxes. These credits can range between 5% and 15% of qualifying R&D costs. If taking the PATH Act R&D credit, a company can receive up to $250k against payroll taxes and take the remainder against income taxes.

Can I claim the R&D credit retroactively?

Yes, we can help you file an amended tax return to claim the R&D credit for previously filed Income Tax returns (past 3 years), but you cannot take the PATH Act R&D credit on an amended tax return.

Don't Worry, We've Got You Covered

OnCentive simplifies the process of identifying and qualifying for business incentives and tax credits; maximizing your business’s profitability, and putting your hard earned money back in your hands so you can use it to grow your business.

OnCentive’s leadership's 100 years of combined tax experience, coupled with our risk-free model is why thousands of hard-working business owners trust OnCentive experts to recover more than $1.5 billion in tax, hiring, and other business incentives.

Maximize Credit Yield

Our profitability is tied with yours. We work off 100% success fees which means we are motivated to find the maximum credits your business can qualify for.

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Comprehensive Reporting

You will be provided with an Comprehensive Report, explaining the credit your company received, the calculations for what was determined and the proof for the money you get back.

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Contested Credit Protection

In the unlikely event that your credit is ever contested, the OnCentive team will defend our work and will fully refund any credits that are disallowed.

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Trusted Credit Experience

Our leadership has over 100 years of combined tax experience. With 1.5 billion in incentives captured and $0 returned to the IRS, you are in good hands with OnCentive.

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See If Your Business Qualify