Federal Research and Development (R&D) Tax Credit

The Federal Research and Development (R&D) Tax Credit is a tax credit that rewards companies to invest in innovation in the United States. Businesses with qualified research and development activities may be eligible to claim unlimited federal income tax credit for costs related to their research and development.

Businesses may use the tax credits against their current income tax liabilities or carry forward those credits to use in future tax years. A Qualified small business (QSB) (less than five years of gross revenue and less than $5,000,000 in gross revenue within the tax year) may be eligible to use up to $250,000 in R&D tax credits per year to pay the company portion of Social Security taxes. These QSBs may use this benefit for up to 5 years and a maximum of $1.25M. Businesses may carry forward any unused tax credits to future tax years.

View this blog entry for additional information on how to identify and claim your R&D tax credits.