If your company is conducting qualified research and experimentation, there are a variety of expenses that you can receive a credit for:
Taxable wages related to the conduct of qualified research and experimentation are includable as a research expense. The wages are quantified by establishing a percentage of an employee’s time engaged in the direct conduct or direct supervision of qualified research. An employee’s qualified research percentage can be substantiated by means other than a time tracking system.
Non-depreciable materials used to test product designs are includable as a research expense. Includable materials are supplies used in design testing procedures, prototype builds and performance evaluations.
Sixty-five percent (65%) of vendor expenses related to design and testing services are includable when the taxpayer bears the financial risk and retains substantial intellectual rights to the resulting information.