Research & Development Tax Credit

The R&D tax credit is the largest government sponsored incentive meant to stimulate technical design, innovation and job creation in the United States. A temporary federal incentive since 1981, it was finally made a permanent federal tax credit as part of the PATH Act of 2015. Most states also have an R&D tax credit, providing an even greater benefit.

A lot of small to mid-sized companies are not aware that many of their day-to-day activities qualify for the credit. Activities such as attempting to develop new or improved products, designs, processes, techniques, software, formulas or inventions can qualify for the credit. Industries including manufacturing, microbrews, distilleries, tool and die/job shops, mold injection, software, pharmaceutical, food processors, apparel/textile, fabricators, agribusiness, and oil and gas can qualify for the credit. The construction industry, including architectural and engineering firms, and general, mechanical and electrical contractors can also qualify.

The R&D credit can provide an immediate source of cash for companies in these industries from prior years, plus a significant reduction in current and future years’ federal and state tax liabilities.

Qualifying Activities

R&D Tax Credit

Developing or formulating new or improved products

Functionally enhancing existing products or formulas

Developing new or improved production processes

Assisting customers with technical problem-solving

Developing new or improved software for use or sale

Applying for patents and prototyping

Businessman touched r and d sign. R d icon network business conc

R&D Tax Credit

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[ultimate_spacer height=”50″ height_on_tabs=”30″ height_on_mob=”30″][ultimate_heading main_heading=”WHITEPAPER DOWNLOADS” module_animation=”transition.expandIn”][/ultimate_heading][dfd_service position=”icon-top” columns_width=”quarter-width-elements” icon_color=”#ffffff” font_size_icon=”23″ connector_color=”#111111″ connector_style=”dotted”][dfd_service_item list_title=”45L Tax Credit” list_subtitle=”DOWNLOAD” icon_type=”custom” icon_img=”14959″ dfd_service_link_apply=”container” title_font_size=”13″ title_font_line_height=”24″ title_font_letter_spacing=”2″ module_animation=”transition.slideLeftIn” desc_background=”#292625″ desc_font_color=”#ffffff” dfd_service_link=”url:https%3A%2F%2Fapp.box.com%2Fshared%2Fstatic%2F4mkxx8qxp0i42q6860watlozc9aiy3hz.pdf||target:%20_blank|”]Each newly contractor built, energy efficient residential dwelling, purchased from the contractor and used as a residence over the last few years is eligible for the 45L Tax Credit of $2,000 per unit.[/dfd_service_item][dfd_service_item list_title=”179D EPAct” list_subtitle=”DOWNLOAD” icon_type=”custom” icon_img=”14961″ dfd_service_link_apply=”container” title_font_size=”13″ title_font_line_height=”24″ title_font_letter_spacing=”2″ module_animation=”transition.slideLeftIn” desc_background=”#292625″ desc_font_color=”#ffffff” dfd_service_link=”url:https%3A%2F%2Fapp.box.com%2Fshared%2Fstatic%2Fsvaetnuz6elfpw6bv7qpi17sn193d0np.pdf||target:%20_blank|”]The deduction ranges between $0.60-$1.80/sq. ft. for the installation of energy efficient lighting systems, HVAC systems, and building envelope.[/dfd_service_item][dfd_service_item list_title=”R&D Tax Credit” list_subtitle=”DOWNLOAD” icon_type=”custom” icon_img=”14966″ dfd_service_link_apply=”container” title_font_size=”13″ title_font_line_height=”24″ title_font_letter_spacing=”2″ module_animation=”transition.slideLeftIn” desc_background=”#292625″ desc_font_color=”#ffffff” dfd_service_link=”url:https%3A%2F%2Fapp.box.com%2Fs%2Fn0t6mle564bgn2phfzz7e6ik41gk16sb||target:%20_blank|”]Firms in all major industries claim the R&D Tax Credit including manufacturing professional, scientific, technical services and information sectors.[/dfd_service_item][dfd_service_item list_title=”Cost Segregation” list_subtitle=”DOWNLOAD” icon_type=”custom” icon_img=”14963″ dfd_service_link_apply=”container” title_font_size=”13″ title_font_line_height=”24″ title_font_letter_spacing=”2″ module_animation=”transition.slideLeftIn” desc_background=”#292625″ desc_font_color=”#ffffff” dfd_service_link=”url:https%3A%2F%2Fapp.box.com%2Fs%2Flblzgbq6946xnx9jezws924u8u6xfd8x||target:%20_blank|”]The study carves out certain qualifying portions of your building into 5, 7 and 15 year lives that are normally accounted for in 39 or 27.5 year categories.[/dfd_service_item][/dfd_service]