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…
- Design, engineer or manufacture its own products?
- Look to improve the functionality, performance or reliability of these products?
- Create new or improved processes in order make things better, faster or cheaper?
- Develop prototypes or computer generated models?
- 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.
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.