Technical based companies are excellent and often overlooked industries for the R&D Tax Credit.

The top misunderstandings about these firms:

*They don't qualify for the credit because they are not "Manufacturing"

*Section 41 was not designed exclusively for Manufacturers, although they are the most common client for R&D Tax Credits.  Qualification is based on activities performed by the company.  
In fact, Architectural, Engineering, and Construction (AEC) often qualify at much higher rates than traditional manufacturers.

*The Client is too small to qualify for the R&D Tax Credit

Note: Technical based firms may qualify even if well below the typical million dollar payroll threshold. The reason for this can be found in the way that the credit is calculated.

The credit is not based on total annual payroll, it's based on total annual payroll multiplied by what percentage of that payroll is a qualified activity for the credit based on the IRS definition of Qualified Activities.

This means that a $400K payroll for a technically based company could yield a higher tax credit than a $2.4M annual payroll of a general manufacturer.

The fastest way to determine if your business qualifies is to answer a few questions at

                           www.BusinessRefundEstimate.com