Research and Development
Does your company need a Research and Development Study?
We assist companies in obtaining federal and state tax credits and incentives for improvements or advancements of their products and processes. These credits are a valuable, but often under-utilized, federal and state tax benefit available to many businesses. For instance, any company that designs, develops, or improves products, processes, and techniques may have qualifying activity.
We are also able to add further value by analyzing research and development expenses for accelerated deductions, as well as linking our federal analysis with similar state tax benefits that may also be available to the company. State benefits, dependent on the state, include credits, sales and use tax exemptions, and loan programs.
Examples of Qualifying Businesses:
Our approach is unique in that we conduct the studies to not only calculate the current year benefit of the credit but to also establish a pipeline to gather data for future studies on a contemporaneous basis. This approach ultimately saves time and results in more robust documentation to support the credit.
Phase 1: Evaluation – We obtain an understanding of our client’s business and goals. During our evaluation, we conduct interviews with key personnel to identify projects and processes where potential qualifying research expenditures may be found. At the end of this phase, we are able to determine the potential benefits of moving to phases two and three.
Phase 2: Implementation - We develop a detailed work plan with the assistance of the client that documents the specific steps necessary to take advantage of the tax credits. We interview additional company personnel, analyze existing cost data (project or activities based) to qualify and quantify the credit. Internal information gathering is critical at this point of the process in the short term, but also in the long term to make the process more efficient on a recurring basis.
Phase 3: Reporting and Audit Support - We provide a final summary that fully documents the federal and state credits available to the client. As part of this deliverable, the client will have detailed computations and write ups to support the credit for tax returns and potential federal and state audits.
Favorable federal legislation enacted in late 2015 makes the R&D credit a permanent part of the tax code. The credit is also now eligible to offset Alternative Minimum Tax for many businesses. As a result, this is a good time for taxpayers to revisit their eligibility for the credit.