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.
Claiming the R&D tax credit can potentially help your business offset increased cash flow. However, simply completing IRS Form 6765, Credit For Increasing Research Activities, doesn’t guarantee the IRS will approve your claim.
Learn a few key things you can do to ensure your R&D tax credit is defensible in the case of an IRS or state audit.
It’s no secret the Research & Development (R&D) tax credit offers potentially significant cost savings for your business, as well as increased cash flow, a reduced federal tax rate, and dollar-for-dollar income tax reduction. However, if you plan on claiming the R&D tax credit, your Qualified Research Activities (QRAs) and Qualified Research Expenses (QREs) will have to pass the Four-Part Test.