Research & Development is typically thought of as white lab coats, large technology companies developing advanced new products, or sending someone to the moon. The above is true if you are talking about the tax credit many years ago. However, recent regulation changes have made the incentive available to small to mid-sized companies.

The R&D tax credit is frequently overlooked because most companies don’t realize that their everyday activities qualify for the credit; there is a misperception of what R&D encompasses.

The R&D tax credit has evolved over the years into the largest tax credit in the tax code for small to mid-sized companies. Previously only fortune 500 companies could afford the resources to meet the documentation and qualification standards. The US Government realized the need to provide all employers in the United States with incentives for keeping manufacturing and design jobs here in the US as opposed to outsourcing abroad.

You can simply think about R&D as it relates to the tax code as a jobs program where the Government is providing employers with incentives for keeping jobs here in the United States related to new or improved products, processes, techniques, formulas, inventions, or software.

Top R&D Industries

Software Development

Agriculture

Semiconductor

Injection Molding

Oil & Gas

Wineries

Recycling