Often companies with qualifying expenditures fail to realize they could capture R&D credits. Under recently developed government regulations, more industries qualify than in the past. And IRS regulations allow eligible taxpayers to “look back” to all open tax years (typically three years plus the current year) for potential R&D credits that were never claimed.
Middle market businesses are gaining particular interest in exploring this incentive since the alternative simplified credit (ASC) process went into effect in 2007, easing the method of calculating the credit due to them. But the regular credit calculation, a more complex process than the ASC, has the potential to result in a greater credit for the right company. Engaging in an R&D tax credit study is generally the first step taken to explore either option.
The R&D tax credit certainly isn’t simple to claim, and it can’t be garnered by every business. But companies in a variety of industries have found that the benefits of tackling the credit study, and the subsequent application process, far outweigh the costs and complication. The process of reclaiming these funds has been successfully undertaken by private businesses across the country, including those in telecommunications, energy and utilities, the pharma and biotechnical sector, and financial services – in addition to manufacturing and distribution.
Further resources for understanding the R&D Tax Credit:
