Research & Development R&D Tax Credits

Many business owners in nearly every industry are unaware that federal and state research and development (R&D) tax credit programs exist. R&D Tax Credits may reward their efforts aimed at developing an improved product. The Research and Development Tax Credit is a government-sponsored benefit that provides cash incentives for companies conducting R&D in the United States. These economic credits were created to incentivize technological advances and the hiring of workers to perform R&D.

Who Is Eligible?

The Research & Development Tax Credit is for businesses of all sizes, not just major corporations with research labs, and many companies are surprised that they qualify.

Any company that designs, develops, or improves products, processes, techniques, formulas, inventions, or software may be eligible. If you employ engineers or outsource product testing you may be able to claim R&D credits. In fact, if a company has simply invested time, money, and/or resources towards the advancement and improvement of its products and processes, then it may qualify for this credit.

R&D credits have become more attractive for business because they have been simplified. A business can transfer them in an acquisition and they can be taken retroactively. A new business or start-up that does not produce income in the initial years, will benefit since R&D costs incurred during these years can be carried forward to offset taxes on future profits.


One of our UK  PKF network partners,  Johnston Carmichael are experts in R&D credit and share their  practical insights on R&D tax relief for overseas companies here.

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