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. It 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 businesses’ ability to obtain and maximize this credit.
At Hall & Company, we work with you to gain a thorough understanding of your company’s research and development process in order to identify areas where the R&D credit may apply. We perform on-site studies, tour your company’s facilities, and interview key personnel to pinpoint and capture all relevant activities and costs.
As part of our engagement with you, we will guide you through the rules surrounding this credit, and we help you to 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. At Hall & Company, we 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 may have access to cash refunds from previously filed income tax returns or you may be able to reduce current or future tax liabilities.
We assist you with the documentation required for 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 in the future by offering you tools, checklists, etc.
- We are on-site when we do the work. We do not perform our studies over the phone.
- We have 25+ years of experience with this specialty.
- We have expertise with R & D studies across a wide range of industries.
- We have performed more than 450 studies, generating an average of $50,000 per study for a total of more than $20,000,000 in credits generated for our clients.
- For existing clients, we provide a seamless solution for R & D studies. Our analysis integrates into the tax return without the delays that are common when dealing with “boutique” firms. We believe it’s important to have our clients maintain more control over the process from start to finish. Since we already have a good deal of the necessary data for our current clients, we are able to pass along valued cost savings.