Research and Development is the driving force behind many U.S.
companies today. The Research Tax Credit, around since the 80’s,
rewards a taxpayer’s efforts to improve its products or processes. It’s a reward for moving technology forward that comes in the form of a dollar-for-dollar general business tax credit. Congress designed this tax incentive to encourage
businesses to spend on R&D and perform that R&D on U.S. soil; even if you are a foreign sub or U.S. firm that manufactures overseas.
In addition to reducing your annual tax liability, R&D Tax Credits can provide an immediate boost to cash flow. Typically there is an open three-year "look back" in which a company can generate credits from the prior three tax years; often resulting in refund checks that can be received at both the Federal and several State levels. Can you imagine recovering overpaid tax from up to 3 years ago? Now imagine if that refund was generated from the expenses associated with a failed R&D experiment!
How does the Research Tax Credit reduce the financial risks of R&D?
lowers your annual tax bill
immediately increases your cash flow
recovers costs from failed projects & prototypes
The R&D Tax Credit provides the incentive to TAKE ACTION NOW!
In a time when many companies are barely scraping to get by and employee talent is being forced out the door; a tax incentive to INCREASE your R&D is the perfect solution to the innovation vs. cash flow dilemma. What impact would increasing your cash flow and/or reducing your annual tax burden have on your company's innovation… employee retention… long-term planning?
