What You Need to Know About Claiming Your R&D Tax Credits in Texas

If you are currently running your own company in Texas, you may be eligible for the Research and Development (R&D) tax credit. At Swanson Reed, we are here to help you with anything that you may need in relation to claiming this tax credit for your business. We can simplify the complex process involved in R&D tax relief by processing your claim and getting your business a rebate in less time than you would have thought possible.

R&D Tax Credits in Texas

In the state of Texas, the R&D tax credit is called the Texas Research and Development Tax Credit. Any corporations and flow-through entities can apply, and unused credit can be carried forward 20 years. Beginning with any tax returns filed after January 1, 2014, Texas taxpayers can claim the state-wide R&D tax credit to offset a portion of their franchise tax. Taxpayers may also choose to use it towards sales and use tax exemption on the purchase or lease of depreciable, tangible property, which is used in qualified research in Texas. The credit rates for the Franchise Tax Credit are 2.5% for companies who have less than 3 years of QREs and did not work through a university. The credit rate is 3.125% for those companies who have less than 3 years of QREs, but actually did work though a university. In contrast, this credit rate is 5% for companies who have 3 years of QREs, but didn’t work though a university. Finally, the rate is 6.125% for any company that has 3 years of QREs and also worked through a university. The Franchise Tax Credit for any one period, including any amounts that are carried forward, cannot surpass 50% of the franchise tax liability for that period.

Assessing Eligibility for the R&D Tax Credit

It is a common misconception that the R&D tax credit may be difficult to qualify for—but it is untrue. Our R&D Eligibility Tool is a good place to start if you think your company might be working on eligible R&D activities.. The R&D tax credit is specifically designed to reward those companies who have risked their investments by placing the importance on research and development. Such risks make this country more competitive and attractive to potential new investors. If you are not in the technological sector, there is no need to worry! Technology includes a wide range of processes, including: medicine, science, manufacturing, engineering, gaming, and architecture. If your company is working on improving a product or process, then you could be eligible for this credit.

How Swanson Reed Can Help

Our trained and friendly staff is here to help you with any potential dilemma that you run into while applying for the R&D tax credit. Once determining your eligibility, we can move onto the process of compiling your claim. Our tax advisors will help corporations, small startup companies, and any other business professionals in between. We can help make your business more profitable by reducing the tax bills that you need to pay. We will ensure that you receive your just rewards for your continued participation and dedication to innovation technologies. If you would like to learn more about claiming R&D tax credits for your business, contact us at 512-333-2076 or fill out our online form.

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