Is Your Business Eligible for the Research & Development Tax Credit?

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing which types of businesses may qualify for the federal R&D tax credit:

Has your business encountered and solved technological challenges in recent years? Maybe you invested in software development, re-engineered manufacturing processes, or performed laboratory testing.

If so, your business may be eligible for the federal research and development (R&D) tax credit.

This credit may be available to U.S. businesses that spent money to develop new products or improve the performance, functionality, reliability, or quality of existing products or trade processes — whether the work was done by employees or a third-party contractor.

Section 41 of the Internal Revenue Code lays out the rules and regulations for the R&D tax credit. The Protecting Americans from Tax Hikes (PATH) Act of 2015 made the credit permanent and broadened its scope to include many small to midsize businesses.

Generally, the R&D tax credit is a nonrefundable amount that taxpayers can subtract from their federal taxable income. Typically, 6% to 8% of…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 23 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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