Tax Credits are now a permanent part of financial planning for all businesses.

Here are some key things to know about R&D tax credits:

• R&D tax credits are a tax incentive that allows companies to reduce their tax liability based on qualifying research and development expenditures. The goal is to encourage innovation and technological development.
• In the US, R&D tax credits are available at both the federal and state level. The federal R&D tax credit is available to companies of any size and reduces a company's federal income tax liability.
• To qualify for the federal R&D tax credit, activities must meet the criteria of a systematic process to discover information, involve technological uncertainty, and be intended to develop a new or improved business component. Eligible expenses include employee wages, supplies, and certain contractor costs.
• Companies must carefully document their R&D activities and expenses to support any credits claimed. It's recommended to work with a tax advisor familiar with R&D credits to ensure proper compliance and maximize the credit amount.
• The R&D tax credit is a dollar-for-dollar reduction in tax liability, so it can provide significant tax savings especially for companies with major R&D initiatives. However, there are complex rules around qualifying activities and calculating the credit amount.
• In addition to the current year R&D tax credit, companies may be able to amend prior year returns to claim credits for eligible past R&D expenses. The ability to file amended returns depends on the open tax years under the statute of limitations.

Let's see what your R&D tax credits are!!