R&D Tax Credits

Do you qualify?

FOUR-PART R&D TAX CREDIT CRITERIA

Regardless of industry, companies are potentially eligible to save up to 15% of qualified research expenses if their activities meet the following requirements, known as the four-part test.

1. Qualified Purpose

Activity must relate to a new or improved product or process, formulation, invention, software, or technique that results in increased performance, function, reliability, or quality.

2. Technological in Nature

The activity fundamentally relies on a hard sciences, such as engineering, physics, chemistry, biology, or computer science.

3. Technical Uncertainty

There must be uncertainty concerning the capability to develop, method of developing, or appropriate design of a new or improved product or process at the outset of the project.

4. Process of Experimentation

Substantially all of the activities are undertaken to eliminate or resolve technical uncertainty. This process involves an evaluation of one or more alternatives and is performed through modeling, simulation, systematic trial and error, or other methods.

Qualifying R&D expenses

Costs related to R&D activities may be eligible to be expensed immediately to reduce overall tax liability. Qualified R&D costs can potentially include these four categories.

1. Wages

For employee wages to qualify, they must perform research activities, like the following:

Conducting or executing the qualified research
Supervising the qualified research
Supporting qualified research

2. Supplies

Supplies used to conduct research may qualify if they are tangible properties directly used in research activities that were not capitalized or depreciated. A common example is raw materials used to fabricate and test prototypes.

3. Contract Research

Valid contract research expenses must include time spent conducting or executing qualified research performed by a contracted third party and not the business entity itself.

To qualify contract research, a business must:

Maintain substantial rights to the research performed; and
Bear the economic risk of the contractor’s development.

4. Computer Rental/Lease Costs

This can include the purchases and maintenance of technology used in pursuit of research. Payments made to cloud service providers may also qualify if those payments are related to hosting new or improved software.

Our promise to you

Cost-free assessments

Your day-to-day tasks may qualify for significant R&D tax credits. Our team is happy to review your organization to assess eligibility.

Access what you deserve

If you haven’t been taking R&D tax credits, it’s not too late. We’ll review past returns and identify any missed opportunities.

Your benefit is our only goal

Our flat-fee, no contingency approach is focused on getting you defensible credits with limited risk.

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