R&D Tax Credit Applicable to Any Industry

Here at Swanson Reed, the biggest problem we see as Specialized R&D Tax Advisors is self-censorship — companies believing they are not eligible for the R&D Tax Credit, when in reality the IRS has a very broad definition of what it considers R&D.

Does your company…

  1. Design, engineer or manufacture its own products?
  2. Look to improve the functionality, performance or reliability of these products?
  3. Create new or improved processes in order make things better, faster or cheaper?
  4. Develop prototypes or computer generated models?
  5. Develop software, technology or other intellectual property?

If you answered YES to any of the previous questions, your company may qualify for the R&D Tax Credit.

Many companies have the misconception that the R&D Tax Credit only applies to scientists in white lab coats and large manufacturing companies. While these types of companies do claim a good portion of the R&D tax credit each year, every company in any industry is eligible for the credit, as long as they meet the requirements of the 4-Part Test.

Click here to read R&D case studies from all different industries, including agriculture, natural medicine, architecture and others.

Companies of all different sizes can reap the benefit of the R&D tax credit as well. In 2011, companies with revenues greater than $250 million claimed $7.6 billion of the total $9.6 billion R&D tax credit claimed. In that same tax year, businesses with less than $10 million in revenues claimed $591 million, and companies with less than $1 million in revenue claimed $284 million.

Companies that are benefiting from the credit are typically receiving a minimum in the tens of thousands of dollars of federal tax credits each year. Find out if you are eligible for the R&D tax credit or contact one of our Swanson Reed Tax Specialists for more information.

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