Analytical research laboratories perform a range of activities involving chemical testing and materials analysis. Generally, these laboratories are considered third-party contractors for tax purposes. However, if your lab develops custom pipelines or assays - e.g. develops a new method to detect a specific component or analyte - certain costs incurred in developing these protocols can be recouped through the R&D Tax Credit.
Employee wages, raw materials & supplies, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.
Examples of qualifying activities:
- Customizing assays (e.g. potency, purity determinations)
- Developing and characterizing new reference standards
- Creating novel protocols for pharmacokinetic, bioavailability, and/or bioequivalence studies
- Solving analytical and/or formulation challenges
- Developing in vitro activity assays for small molecule/peptide therapeutics
- Implementing automation or robotics
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Analytical Chemists/Scientists
- Chemical Engineers
- Formulation Scientists
- Laboratory Technicians
- Materials Engineers
- Operations Managers
- QA/QC Personnel
- Research Scientists