Both small and medium-sized businesses can benefit from the Research and Development (R&D) tax credit, but most people don’t understand how they can leverage these credits to reduce their tax bills. In the beginning, it was primarily large corporations that were using the tax credits.

Then, congress took action to make this government incentive permanent so it could be used by small and medium-sized businesses across the country. The “Alternative Minimum Tax Bar” was implemented to open the door for businesses with $50 million or less in gross receipts.

Do You Qualify for the R&D Tax Credit?

It can be a challenge to navigate confusing language and complicated tax forms. Our team simplifies these processes to support business owners. Here are a few questions to ask to determine if you can qualify for the R&D tax credit for your business:

  • Do You Create Products? Businesses that create physical products are often great candidates for this tax credit, such as food processing, manufacturing, engineering, architecture, construction, or software companies.
  • Are Things Changing in Product Production? It is rare for a company to continue making their products in the same way for years on end. When your company is engaged in the needs of the consumer, it is common to put resources into improving products, reducing production costs, automating systems, etc.
  • Does Your Company Carry Risk for the Work? Even if you are being paid for the work, if you carry any risk then you might be able to qualify for these tax credits. For example, if you work as a subcontractor with the risk that your work might be rejected, then you should talk to someone who understands the tax credits to see how they apply to your business.

Personalized Recommendations for Your Business

At ReFOCUSed Business Consulting, we help business owners optimize profits, manage strategies, and improve overall systems. Tax savings can be complicated, which is why we encourage you to schedule a consultation so we determine the best way you can leverage available tax credits. If you are looking for more information, we invite you to contact us to learn more.

For more information or questions about the R&D Tax Credit, please contact us.