Signed into law by congress in 1981, The U.S. Research and Development Tax Credit – sometimes called the Research and Experimentation Tax Credit – helps companies remain competitive by allowing a reduction of federal and state income taxes for qualified expenditures. Investing in research and development is vital to innovation, and innovation is the driving force of our economy.
The 2015 PATH Act made the tax credit a permanent part of the IRS code, and allows almost any manufacturing or technology company to take advantage of the credit. With no limit on the R&D Tax Credit funding, U.S. businesses stand to receive benefits which can increase your company's bottom line - both at the federal and state levels.
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Credits are not limited to businesses that solely provide product development — they are equally applicable to companies that develop new processes including improved efficiencies. Companies may claim the credit for products they have developed to sell to their customers. In fact, many of our clients claim credits based solely on what they invest in developing a new product or process for their customers.
Enquire nowProvides cash refunds of previously paid federal and state taxes.
Dollar-for-dollar reduction of current-year federal tax liability and applicable state tax expense.
Credit carries forward, up to twenty years
Frees up capital for investment in your business, new development, and debt reduction.
Increases the value of your business to investors or potential buyers.
Apply the federal R&D tax credit against payroll tax (applicable to certain startup companies)
Recent changes have made the R&D Tax Credit more beneficial to small and mid-sized businesses, and even to start-ups. This is because the landscape of R&D rules, IRS policy, and legal interpretations has led to a net increase in R&D-eligible activities in recent years.
The PATH Act of 2015 allows small businesses to claim R&D costs against payroll taxes, resulting in a refund from the IRS.
Companies no longer need to develop a product or process new to their industry to qualify for the research and development tax credit. These improvements only need to be new to their company.
Established by the IRS, a four-part test can help you identify if your company’s research and development activities qualify for R&D tax credit.
The research improves the quality, function, or reliability of a process or product.
The research activities involve stimulation, logical trial and error, assessing alternatives, and refining hypotheses.
The qualified activities identify information to remove ambiguity in the development or improvement of a production process.
The research relies solely on physical sciences, biological sciences, computer sciences, or engineering.
Our licensed engineers and attorneys are specialized across a wide range of industries including:
We’ve delivered studies for Fortune 500 companies, mid-sized companies, and small businesses. Our expertise has been shaped by experience managing hundreds of R&D tax credit studies, as well as R&D state and federal audits, many through conference appeals. And, Meridian’s lead legal strategist has influenced the code and regulations, expanding qualifications.
Get StartedWe take the time to get to know our clients’ business, ask the right questions, and document our results, saving more than $70 million in tax payments annually, with a comprehensive approach to qualifying and quantifying credits.
A lot of providers cut corners to increase profit margins at the client’s expense. For example, instead of identifying and documenting 3 to 5 of the biggest projects conducted by a client in a prior year, we uncover every qualifying activity.
If you think your company might be performing work that qualifies for the R&D tax credit, don’t let tax savings go unclaimed—and don’t be deceived by preconceived notions of what R&D is, or which companies can qualify.
Across industries, the possibilities for qualifying activities are out there, and if you’re willing to take a look, you could uncover vital tax savings to reinvest in your business and fuel your next big project. To learn more about the credit and how much you might save, contact us.
Our client extruded aluminum and other metal alloys for various uses includingwindow frames, furniture, marine products and more.
This start-up company developed custom apps for small banking, insurance, andother financial service providers.
This manufacturer designed custom machines to fold cardboard into customshapedand sized boxes.
It’s important to develop a system to easily track R&D activities, and understand which activities are deductible.
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