The Research and Development (R&D) Tax Credit is a government-sponsored tax incentive that rewards companies for conducting R&D in the United States. The credit was implemented to incentivize innovation throughout the economy and to keep technical jobs here in the U.S.
What constitutes R&D regarding the credit is much more expansive than realized, with activities related to applied sciences and other technical projects qualifying companies from numerous industries.
The R&D Tax Credit is for businesses of all sizes, not just major corporations with research labs – and many companies are eligible, with an expansive list of activities qualifying for the credit.
The US Tax Credit is considered generous as each state can also offer its proper R&D Tax Credit, which is normally combined with the federal one.
U.S. Companies can benefit from an incremental R&D tax credit, made up of two different incentives known as the Traditional R&D Tax Credit and the Alternative Simplified Credit.
If your company does any of the following, your business likely qualifies for the R&D Tax Credit: