What are R&D Tax Credits?
The R&D Tax Credit can provide an immediate source of cash as well as significant reductions to current and future years' federal and state tax liabilities.
It may not be well known, but countless companies are eligible for these federal and state tax credits and are not aware of it. The federal R&D Tax Credit was introduced originally in 1981 and was intended to incentivize companies to develop new and improved products and processes. Now there are approximately 40 states that offer their own R&D Tax Credits in addition to those offered by the federal government.
The R&D tax credits are eligible for a variety of industries and include, but are not limited to:
- Manufacturing (almost any sector)
- Engineering (mechanical, electrical, civil)
- Agriculture (field, greenhouse, irrigation)
- Food & Beverage processors
- Contract Manufacturers
- Biotechnology and Pharmaceutical
- Life Science
- Software Developers
- Companies with eCommerce sites
- Technology companies
- Web or Cloud based businesses
Companies That Would Most Likely Benefit:
- Gross sales generally greater than $3,000,000, or
- Annual payroll generally greater than $1,000,000
- Zero or diminishing Net Operating Losses (NOL's)