What is the R&D Tax Credit

You may be more eligible than you think to claim expenses against the lucrative R&D tax credit.

Please be advised that information in this article is for educational purposes only. Nothing within this article should be consider tax or legal advice. Should you have questions regarding your eligibility, our team of tax professionals are available for an individual consultation to address your unique circumstances. Information for this article has been obtained primarily from www.IRS.gov as well as from www.uschamber.com.

It’s a common misconception that the IRS research and development (R&D) tax credit is only available to researchers and scientists. In reality, this tax credit offers a great opportunity for small businesses to reduce their tax liability.

What is the R&D tax credit?

The R&D Tax Credit, as prescribed in 26 U.S.C. § 41, (www.irs.gov) may be claimed by taxpaying businesses that develop, design or improve products, processes, formulas or software. The credit was introduced in 1981 to increase technical jobs in America by encouraging businesses to invest in innovation. The credit is calculated based on the wages of the employees that are performing the qualifying work, making it the most valuable tax incentive available to businesses.

However, what constitutes Research and Development with regard to the credit is much more expansive than business owners realize, 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 truth is that qualifying for the credit is not complex. Your company simply needs to be working to improve a product or process here in the U.S. There are a number of qualifying research activities (QRAs) that apply to thousands of businesses, including small and mid-sized, in countless industries.”

Statistics relate that less than 3 in 10 businesses who qualify for the credit actually claim it, while virtually every large company makes the claim. Quite often small businesses leave significant amounts of money on the table because of common misconceptions related to qualifying.

Is it worthwhile to take the time to discern what parts of your business operations could apply toward this credit?

Due to numerous modifications and expansions over the years, more companies than ever before can benefit from this valuable incentive.

Principals of Offsite Construction Building Techniques

Offsite and modular companies often qualify for R&D credits because they’re constantly improving products and processes—panel designs, factory workflows, automation, QA/QC systems, and installation methods. Understanding offsite construction techniques helps identify where technical experimentation and performance improvements happen in day-to-day operations.

Exploring Wealth Building, Tax Strategies, and Investment Trends

Tax strategy is one of the fastest ways to improve cash flow without changing your sales pipeline. This conversation on wealth building and tax planning connects incentives like the R&D credit to broader financial habits—helping owners and investors keep more of what they earn and reinvest with intention.

Better Business with Risk Management

Claiming incentives responsibly means having clean documentation, clear processes, and defensible records. Risk management best practices help businesses support their R&D position with strong tracking of qualifying activities, wages, and project intent—reducing audit anxiety while protecting upside. It’s how you turn a tax opportunity into a confident, repeatable strategy.

The initial consultation is a simple and quick process. To schedule your consultation, please me at michele@micheleboyerassociates.com or call me at 720-892-9755