Research & Development Credits

Created in 1981, the research and development credit is the most significant of the few domestic tax credits remaining under federal tax law. With benefits to companies exceeding $12,000,000,000 a year, the benefit is a common but often untapped opportunity for virtually any company/industry developing a new process or product, or improving an existing process or product. With the ability to take the credit in all open tax years and to carry forward unused credit 20 years, the potential financial return for almost any company is significant and warranted.

About R&DAbout R&D

Applied to a broad range of industries and activities, R&D benefits apply at both federal and state levels, as a credit and deduction, without any qualification related to the size of company. Established to improve American competitive strength, the program provides companies an opportunity to claim up to 20% of incremental qualified research expenses related to most kinds of product or process improvement. As you will see, R&D activity is no longer associated solely with high tech, biotech and pharmaceutical companies; the benefits now are available to almost any U.S. manufacturer, as well as other targeted industries. General qualified activities include:
  • Developing a new process or product
  • Developing new equipment, machinery or tools
  • Improving an existing process or product
  • Improving the environmental impact of your manufacturing process
  • Investigating new materials

Please review our R&D Scorecard for more examples of qualified activities.