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

R&D Tax Credit


small business

Deborah Roth, CPA
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.


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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Common Challenges When Claiming R&D Tax Credits

Although claiming this credit can offer considerable benefits for companies engaged in R&D efforts, the process can be challenging.

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No Profits, No Problem: R&D Tax Credits Can Help Your Startup

Running a startup is all about innovation and making the most of your resources. But what if you're not yet turning a profit?

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What Happens to Unused R&D Tax Credits?

What happens if you don’t use all your credits in a single year? Don’t worry! The US tax code has you covered.

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