Research and Development Eligibility
To take advantage of this R&D Tax Credit, a firms Qualified Research Expenses (known as QRE’s), must pass a rigorous four-part test. The QRE’s are made up of three components: Wages, Supplies, and Contract Research. Each of the component categories included in the QRE’s must pass the rigid Four-Part Test criteria. Contact us below to schedule a call to determine if your business activities qualify.
Qualifying for R&D
The R&D credit comprises the following types of Qualified Research Expenses (QRE):
- Wages paid to employees for qualified services (including amounts considered to be wages for federal income tax withholding purposes)
- Supplies (defined as any tangible property other than land or improvements to land, and property subject to depreciation) used and consumed in the R&D process
- Contract research expenses paid to a third party for performing QRA’s on behalf of the taxpayer, regardless of the success of the research, allowed at 65% of the actual cost incurred
- Basic research payments made to qualified educational institutions and various scientific research organizations, allowed at 75% of the actual cost incurred.
If you’re coding in the U.S., you know how expensive it can be versus outsourcing to India and Eastern Europe. Congress wants you to keep jobs on American shores. The R&D Credit is designed to do just that!
Does your company partake in any of the below Qualified Research Activities?
- Implementing new feature requirements based on customer feedback
- Publishing newer versions of existing applications with new features
- Adding new processes to the software to automate data transfers
- Writing APIs to integrate with third party applications Enhancing reliability and speed of specific processes
