Can You Claim the Research and Development Tax Credit?
What Is the R&D Tax Credit?
Discover how your innovative business can benefit from the research and development (R&D) tax credit. Designed to foster innovation and growth, this federal incentive rewards companies for investing in the design, development, and improvement of processes, products and services.
By engaging in qualified R&D activities in the U.S., companies can receive tax credits, providing a dollar-for-dollar reduction of income tax liabilities. Start-up companies can even leverage a portion of these credits to offset federal payroll tax liabilities. Learn how your business can save money and drive expansion through the R&D tax credit today.
How Can You Claim an R&D Tax Credit?
While the process to apply for, and ultimately, receive cashback from the R&D tax credit is complex, our Tax Credits & Incentives Advisory team has developed a systematic approach designed to maximize your R&D tax credit and gain a solid defense against Internal Revenue Service (IRS) criticism. When assessing the potential for R&D tax credit benefits, we analyze your:
- Tax returns for the prior four years
- Prior research credit studies
- Organization charts
- Employee W-2 wage amounts
- General ledger information time tracking data
- Internal documents that define how potentially qualifying projects are approved
We can help you capture cash benefits that typically will greatly exceed the investment of this analysis. Determining which activities qualify for the R&D tax credit begins by passing the Four-Part Test created by the IRS.
How Can Cherry Bekaert’s Technology Driven Process Help?
Discover how our efficient R&D survey process, powered by our proprietary tool, simplifies the allocation of Qualified Research Expenses (QREs) across your organization. Here’s what our process entails:
Scoping the R&D Credit:
- Gather pertinent information
- Collect financial data electronically
- Identify QREs
- Conduct interviews with key personnel
- Estimate federal and state research credits
- Prepare a comprehensive work plan for the research credit study
Performing the R&D Credit Study:
- Accumulate financial and cost accounting data
- Organize documentation for qualified research activities
- Interview technical subject matter experts
- Analyze current and prior year expenses to support base amounts and credit-eligible QREs
- Prepare methodology and interview memoranda demonstrating compliance with Section 41
- Calculate the required capitalization of Specified Research or Experimental (SRE) Expenditures
- Deliver IRS audit-ready documentation
