In recent years, cryptocurrencies such as Bitcoin and Ethereum have grown in popularity among consumers, investors, and institutions. These digital assets require deregulated, secure storage on the blockchain to ensure users’ privacy. Through extensive research and development (R&D), small businesses continue to influence market share with new cryptocurrencies and enhancements to blockchain technology. If your company creates a novel digital currency, generates source code, or launches a cryptocurrency app, you may be able to offset significant costs by claiming the R&D Tax Credit.
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:
Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?
Benefits for the R&D Tax Credit vary from state to state. Get an accurate estimate of what your potential state tax credit!