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Research and Development Tax Credit

The Benefits of a R&D Tax Study

The benefits of having an R&D Tax Credit Study performed are:

    • Dollar for dollar credit against taxes owed or previously paid

    • Carry forward credit for future profitable years

    • Immediate increase in company cash flow

    • Credit average is over $25,000 per $1,000,000 in total company payroll

How a R&D Tax Study is Conducted

Our service partners utilize a team of highly qualified professionals including IP Attorneys with engineering backgrounds and adheres to the Comprehensive Project by Project Approach methodology as required by the IRS. By following this methodology, every applicable employee is qualified with activity, hours spent, and corresponding wage paid, in order to maximize the incentive for our clients. Every applicable section of the code is strictly adhered to and first-in-class documentation to substantiate our findings are provided.

Who Qualifies for the R&D Tax Credit

Who and what qualifies as research and development (R&D) is much broader than most realize. Activities and costs related with developing or improving a product and/or process often qualify for R&D tax credits. Furthermore, engineering, design, testing, and programming are now included as Qualified Research Activities (QRE). Industries that most commonly qualify are:

      • Manufacturing
      • Fabrication
      • Engineering
      • Software Developers
      • Chemical
      • Tool & Die
      • Machine Shops
      • Plastics Manufacturers
      • Pharmaceutical
      • Biotechnology
      • Food Sciences/Manufacturers

What Qualifies for the R&D Tax Credit

If your company is involved in any of the following activities, you may be able to claim the R&D Tax Credit:

  • Developing an innovative product that is new to the market
  • Engineering and designing a new product
  • Conducting research aimed at discovering new knowledge
  • Searching for ways to apply new research findings
  • Designing product alternatives
  • Evaluating product alternatives
  • Introducing significant modifications to the concept or design of a product
  • Designing, constructing, and testing pre-production prototypes and models
  • Engineering activity to advance the product’s design to the point of manufacture
  • Utilizing systems processing modeling
  • Conducting system and functional requirements analysis
  • Utilizing integration analysis
  • Experimenting with new technologies
  • Experimenting with new material and integrating the material to improve manufactured products
  • Engineering to evaluate new or improved specification/modifications in terms of performance, reliability, quality, and durability
  • Developing new production processes during prototyping and preproduction phases
  • Conducting research aimed to significantly cut a product’s time-to-market
  • Conducting research aimed to obtain more efficient designs
  • Developing and modifying research methods / formulations / products
  • Paying outside consultants / contractors to do any of the above activities

Getting Started

An initial consultation is done over the phone with a Growth Management Group R&D Specialists to identify potential Qualified Research Expenditures (QRE). If qualifications are identified, an authorization page is collected to begin working on the client’s behalf. No fee is charged until credits are identified and utilization is verified with the client’s accounting representation. Contact Us to get started.

R&D Tax Credit History

The Research and Development Tax Credit was enacted in 1981 to encourage American investment in innovation. Manufacturers and other technical based operations often qualify for lucrative tax credits based on qualified activities.

The Manufacturing Incentives benefit is a Federal program designed for Companies that perform Manufacturing in the U.S. This program is listed under Section 41 or the IRC (Internal Revenue Code) and continues to be amended on an annual basis as the U.S. Manufacturing landscape continues to evolve. This is an engineered based program that focuses on a company’s operations and processes in order to determine their qualification for incentives. The Manufacturing Incentives benefit provides an avenue to receive tax money back from prior years while also reducing current taxable income on a dollar-for-dollar basis.