R&D Tax Breaks Are Not Just For The Big Boys

Many companies are missing out because they are assuming that the R&D tax benefits are only available to the larger companies who have huge research budgets and large laboratories. This is a misconception and one that needs to be clarified as many smaller businesses are missing out on large tax breaks that they could be enjoying and reinvesting in their company.

What Is the R&D Credit?

It is a tax break that was brought in by the US government back in 1981 in order to provide an incentive for companies to perform ground-breaking work and make technological gains that would provide benefits for society at large. It has, over the many years that it has been in place, been the topic of many legislation and congressional matters. This has a lot to do with the confusion that arose over who was actually eligible and what was defined as research. There have subsequently been many court cases involving the IRS seeking clarification on exactly this subject.

Who Can Claim It?

Any New York based company who passes the eligibility rules defined by the IRS can make a claim for R&D Credit. It is a complex area and it is advised that any business who is considering making a claim discuss their tax affairs with a professional and qualified agency such as Swanson Reed who can make an assessment of exactly what your company is entitled to. Many companies miss out on dollars to which they could well be entitled purely because they do not realize that the work  they do can be interpreted under the rules as relevant research and development.

Changes In Progress:

There are currently proposals in place to make the whole R&D tax incentive area much clearer and easier to understand. The IRS has been made aware via several court cases that there is confusion over the current definitions that makes it difficult for US companies to know where they stand in relation to the taxation of R&D. Whilst the IRS denies that the changes broaden out the definition, it is felt by many professionals in the area that the changes will make it easier for many companies to get the tax breaks which they are entitled to.

Make sure that your company based in New York is not one of those missing out. Give your company the best chances and take professional advice about what you need in order to make a claim. Swanson Reed has a Contact Form which you can complete and return to start receiving valuable guidance from a committed firm which has your best interests at heart.

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