Research and Development (R&D) Tax Credit

You may qualify for a tax credit if you are designing new products and processes, or improving existing ones.

Is my business eligible?

If your company has designed products or improved its production process, the answer is “yes.” The tax definition of research and development (R&D) is much broader than the traditional definition of R&D, which most equate to work performed by scientists in white lab coats.

Many companies are surprised to find that more than a few of their activities qualify for the R&D credit, and often fail to realize these day-to-day activities could translate to a dollar-for-dollar reduction of their federal and, if applicable, state income tax liability.

An organization could be eligible to claim the R&D tax credit if it:

  • Spends time and resources to create new and innovative products
  • Improves existing products
  • Develops processes, patents, prototypes, or software
  • Employs technical personnel such as engineers, scientists, or software developers

Typical Development

Companies in a variety of industries can qualify, some of which include:

Companies can benefit in several ways:

  • Claiming immediate tax refunds with interest from your previous tax returns
  • Reducing your current-year estimated tax payments
  • Decreasing your current-year effective tax rate and income taxes
  • Offsetting the credit against the employer portion of payroll taxes

Watch our video to learn more about how the R&D credit can help you save on taxes.

Why CLA?

Our dedicated team of R&D professionals has helped small, medium, and large businesses in a variety of industries identify and document their qualifying research activities to maximize their R&D credit potential. Our team understands the nuances of the complex rules for qualification, have deep knowledge in the most credit-intensive industries, and have years of experience developing supportable tax credit claims.

Our experience translates into a cost effective and efficient claim process for your company that limits the risk of noncompliance. We will spend the time to fully understand your business and your research activities, scale our tools and processes to fit your situation, and partner with you to ensure quality, minimize risk, and make efficient use of everyone's time.

Tax Credit Claim Process

Our approach

For each period the research credits are available, we will calculate qualifying R&D expenditures by identifying research projects, wage costs, and other research-related expenses.

Afterwards, our R&D professionals will spend time identifying and fully documenting your company’s research activities. We’ll present the findings in a comprehensive report with the documentation necessary to support the claim. We will also complete the appropriate federal and state research credit tax forms, and we can even amend your past tax returns, if necessary.