Research and Development Tax Credit
If you are making improvements to a production or manufacturing process, developing software, designing a new product, or other forms of Research & Development (R&D), you may be eligible for significant tax benefits.
What is the R&D Tax Credit?
The R&D tax credit is a dollar for dollar income tax credit for Companies that engage in qualifying research and development activities, that can increase cash flows by reducing current and sometimes prior income tax paid. Congress enacted the R&D tax credit to incentivize businesses to perform research and development activities within the United States. Recent changes in the law such as the IRS’s removal of the “discovery test” and new alternative calculation methodologies, along with recent court rulings have enhanced the ability to obtain and maximize this credit.
At Hall & Company, we specialize in obtaining a thorough understanding of your company’s research and development process. We perform our studies on-site, touring your company’s facilities to identify the areas where the R&D credit may apply. Our on-site analysis also includes interviews of key personnel to identify and capture all relevant activities and costs. As part of our engagement with you, we will guide you through the rules that support this credit and help you to understand and apply them to your research and development activities. We will also assist you in filing the necessary tax forms to claim the credits both at the federal and state levels, as applicable.
What Qualifies for the R&D Tax Credit?
If you are performing any of the following list of activities, your Company may qualify for the R&D Tax Credit:
- Designing or developing new products
- Designing or developing computer software and software applications
- Engaging in design and development techniques
- Designing or developing inventions
- Designing and developing processes
- Building Prototypes
- Designing and developing formulas
- Enhancing features to existing products, technologies or materials
In addition to the list above, some of the other types of development and manufacturing activities that may qualify as research and development are as follows:
- Designing and developing of tools, fixtures or molds
- Developing control programs / logic controllers
- Developing packaging to improve product quality
- Developing cost/energy efficient manufacturing processes
- Increasing operating and economic efficiencies
- Improving nutritional content of food products
- Alternative materials testing
- Integrating new materials to improve product performance and manufacturing processes
- Prototype modeling
Keep in mind that above lists are not all inclusive. We, at Hall & Company, will analyze your activities to makes sure that all qualifying activities are identified.
What are the Benefits of Performing an R&D Tax Credit Study?
If you qualify for this credit, your Company can potentially obtain cash refunds from previously filed income tax returns or reduce current or future tax liabilities. We will also assist you in documenting the credit and teach you how to identify and capture research and development tax credits in the future. Our study can also include analyzing the R&D tax credit claimed in accordance with the requirements of FIN 48 implementation.
What are the Benefits of Using Hall & Company to Perform Your R & D Credit Study?
By using Hall & Company to perform your credit study, you will enjoy the following benefits that make the research and development credits even more valuable:
- We charge fixed fees and not contingent percentages
- We provide audit defense
- We provide a preliminary analysis of the potential benefits and costs at no charge.
- We provide our clients with a system of capturing the credits/incentives on a go forward basis-tools and checklists, etc.
- We are onsite when we do the work. We do not perform our studies over the phone.
- We have 25 plus years of experience in this area.
- We have performed R & D studies for many different industries
- We have performed over 450 studies, generating an average of $50,000 per study for a total of more than $20,000,000 in credits generated.
- For existing clients, we provide a seamless solution with regard to performing the R & D studies and having this information quickly integrate into the tax return without the delays that are found when “boutique” firms are performing these studies and clients are waiting on them to complete their work. There is more control over the entire process from start to finish by having these R & D studies performed by Hall & Company. We already have much of the data so our clients will enjoy a cost savings that they would not otherwise obtain by using a “boutique” firm.