The U.S. federal tax law provides a benefit up to 20% in the form of a non-refundable tax credit for companies that engage in qualified research and development activities. The credit, if used, can create immediate cash flow by reducing tax liability dollar for dollar. While non-refundable, the credit can be carried back one year and forward twenty years for any excess credit not used in the current year. Additional cash flow can be realized by looking for credit opportunities in any open tax years (currently 3 years).
• Developing New or Improved Product
• Developing New Technology
• Creating a New Production Process
• Improving Current Processes
• Developing or Improving Software
• Developing Prototypes or Models
• Select Developed Software
It is important to remember that nearly all businesses have potential benefit to claim the R&D tax credit. Any business that is currently improving or creating new or improved products, processes, or technology has potential to take advantage of the credit.
The R&D tax credit is one of the most beneficial federal tax credits offered currently. The R&D tax credit is both a federal and state incentive, with roughly 70% of states offering a credit. The first step to taking advantage of this strategy is to determine what areas of opportunity you might have. For a complimentary analysis please download and fill out our feasibility questionnaire or contact your local Bedford representative. To request additional information on Bedford’s R&D program email firstname.lastname@example.org.