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Frequently Asked Questions

Listed below are some of the most frequently asked questions our team receives about R&D tax credits

What expenses can qualify for the R&D Tax Credit?

The Research and Development Tax Credit is also known as the “Credit for Increasing Research Activities”. As such, the more research expenses a company incurs year over year, the greater the tax credit will be. For all research costs in a given year, a company can expect anywhere from 6-20% in federal credits in addition to state credits, if applicable.

  • Wages – Wages paid to employees who conduct qualified R&D activities, as well as those employees who are directly supervising and supporting the research.
  • Supplies – Supplies and raw materials used or consumed in the R&D process, including prototyping and testing of a new or improved product, process, formulation, or patentable business component. This also includes expenses related to rental of cloud computing assets used in software development.
  • Contract Research – Payments made to a 3rd-party contractor, 1099 employee, or university for technical activities conducted on behalf of the taxpayer for technical analysis or testing, design services, and other development activities for a qualified business component.
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