Which Businesses Can Benefit From the R&D Tax Credit?

R&D Tax Credit

Enterprise

small business

By
Deborah Roth, CPA
on
July 6, 2023

The R&D tax credit can benefit a wide variety of businesses from many industries, including startups, manufacturing firms, technology companies, financial companies, software development businesses, and many more. The R&D tax credit enables businesses to increase cash flow and savings, reduce the Federal income tax rate, and receive Federal and State dollar-for-dollar income tax reductions.

Businesses That Can Benefit From the R&D Tax Credit

Many businesses can potentially offset up to $500,000 in payroll tax liability for qualifying activities.

Startups

Startup businesses are able to claim and benefit from the R&D tax credit. As long as a business has 5 years or less in revenue, has $5 million or less in revenue in the current year, and conducts qualifying research activities, it is eligible for the credit.

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Section 174 Explained

Section 174 of the Internal Revenue Code now defines the treatment of Specified Research or Experimental (SRE) expenditures. Learn more!

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Common Misconceptions About R&D Tax Credits For Startups

Each year, numerous qualifying businesses miss out on the advantages of R&D tax credits. Discover the common misconceptions.

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Understanding the Alternative Simplified Credit Calculation for R&D

The ASC method offers a simple alternative, particularly for companies with a limited R&D history. Is it the right method for you?

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