Research & Development Tax Credits

Your Untapped Resource For Revenue

The research and development (R&D) tax credit is a tax incentive offered to companies who engage in research and experimental activities in the U.S. and incur qualified research expenditures (QRE).

R&D tax credits deliver a dollar-for-dollar reduction of your tax liability. In other words, R&D tax credits provide a revenue source for your business without requiring you to sell additional products or provide more services.

What Are Qualified Research And Development Activities?

Qualified R&D activities are defined as research and experimental activities prior to commercial production. The expenses incurred during these qualified R&D activities are considered QRE for purposes of the tax credit. Qualified R&D activities expenditures may include employee and independent contractor wages.

What Costs Qualify For An R&D Tax Credit?

CTI helps your company analyze the Development Lifecycle in order to accurately capture every single qualified R&D activity in the development process. In general, the types of QREs include:

  • Wages for research activities and direct support and/or direct supervision
  • Supplies used or consumed in the conduct of research
  • Contract research for payments made to others for the conduct of research

Phase One: 1 to 2 weeks
High-Level Feasibility
In Phase One, the CTI team obtains better understanding of your company’s operations and businesses by reviewing company data and interviewing key financial and technical personnel about their departments’ R&D activities.

In this phase, CTI will:

  • Estimate your company’s qualified research activities and qualified research and development expenditures
  • Draft preliminary R&D tax credit calculations for expected credit benefits
  • Develop a methodology and detailed work plan to document and support your company’s federal and state R&D tax credits during Phase Two

Phase Two: 8 to 10 weeks
R&D Tax Credit Study
In Phase Two, our R&D specialists perform a comprehensive and detailed analysis of your company’s R&D activities, quantify QRE, create federal and state R&D tax credit calculations and develop and organize the supporting R&D work papers.

In this phase, CTI will:

  • Conduct extensive interviews with company technical personnel
  • Complete costing analyses
  • Finalize R&D activity memoranda
  • Gather contemporaneous R&D documentation
  • Review and qualify any agreements for contract research
  • Present final deliverable to company management documenting and supporting R&D tax credit

Phase Three: Timeline varies
Audit Support
Phase Three is a critical step in the development of an overall and efficient process of securing and maximizing the R&D tax credit. CTI helps companies contemporaneously develop internal processes to better capture and document their R&D expenses and help defend R&D claims during IRS and State Taxing Authority examinations.

Research And Development Resources

R&D tax credits are among the most misunderstood tax incentives today, resulting in too many businesses leaving available money on the table. The below resources help to shed light on the R&D tax credit and how your business may be rewarded significant tax savings for your research and/or experimentation.

R&D Tax Credit Calculator
All businesses that perform research and development activities in the U.S. qualify for the R&D tax credit. Quickly estimate your company’s benefit by filling out the fields below:

Ready to discover your business activities that qualify for R&D tax credits? Click here to connect with a Tax Navigator at CTI and receive a free, 30-minute consultation.

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