The Research and Development (R&D) tax credit was originally created by Congress to be a part of the Economic Recovery Tax Act of 1981. The purpose of Research and Development Credits is to encourage American industries to invest in R&D activities, which would then stimulate R&D activities among businesses through tax incentives.
Benefits of Research and Development Credits to Clients
With Research and Development Credits, clients would receive millions of dollars in tax credits, also resulting in cash back from the IRS for previous open tax years. Benefits also include future tax savings, and a carry-forward up to 20 years.
The US Research and Development Credits can be used by a variety of industries, which include manufacturing, tool and die, software developers, fabrication, engineering, chemical, pharmaceutical, food sciences, and more.
Important Considerations When Choosing a Consulting Firm for Research and Development Credits
Ask whether each individual involved with your study is an intellectual property attorney with an engineering background, or an engineer? Both are preferred, however the IRS requires IP attorneys with an engineering background.
Does the firm use the Comprehensive Project-by-Project methodology when they conduct their studies? Many less reputable companies use individuals with no engineering or scientific background to write their reports. The documentation should directly connect the project to the employee, and the estimated time that spent on the project to each year under engagement.
Does the firm offer flexible payment arrangements and affordable pricing and? Does the firm collaborate with both the CPA firm and the client to understand their needs via this program.
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