Invented in 2008, blockchain began as a payments ledger for cryptocurrency giant Bitcoin. The open-source technology gives companies the capability to securely track any type of data set within numerous applications. Blockchain is a decentralized technology for making permanent, time-stamped digital records, and technology companies are researching numerous applications to real-world situations. Processing and storing large amounts of data and improving upon existing tracking systems require extensive research and development (R&D). If your blockchain company develops, tests, or secures platforms, you may be able to take advantage of the R&D Tax Credit to recoup costs spent on innovation.
Employee wages, supplies, cloud computer rental, and third-party contractor costs associated with research and development 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:
- Improving data privacy and protection
- Implementing quality and performance improvements of blockchain platforms
- Developing smart contracts (e.g. lease agreement, peer-to-peer loans)
- Developing new applications for sensitive data (e.g. electronic health records)
- Securing source code on the blockchain
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
- Blockchain Developers
- Blockchain Engineers
- Computer Scientists
- Legal Consultants
- Project Managers
- Quality Assurance (QA) Engineers
- Security Engineers
- User Interface (UI) Designers