How It Works
The Research and Development Tax Credit provides a dollar-for-dollar reduction in taxes for qualified research expenses. Many activities that businesses consider routine development actually qualify, including software development, product improvements, manufacturing process enhancements, and more.
Who Qualifies
- Software development companies
- Manufacturing businesses
- Engineering and design firms
- Any business developing new or improved products/processes
Key Requirements
- 4-part test: technological in nature, elimination of uncertainty, process of experimentation, permitted purpose
- Qualified research expenses documentation
- Time tracking for R&D activities
- Form 6765 filing
Documentation Needed
Project documentation, time records, payroll records for R&D staff, contractor invoices, supplies documentation.