Research & Development Tax Credits

Dollar-for-dollar tax savings from R&D tax credits that directly lower a company’s tax obligation and offset payroll taxes are frequently disregarded or underutilised. Both the federal government and the states give the R&D credit providing it as a way to reduce state tax obligations.

R & D

Claiming R&D Tax Credits can be challenging because documentation is needed to show that the underlying activities satisfy the four-part test, federal and state tax laws and regulations are constantly changing, and eligibility is determined only after a careful examination of the qualifying activities. Companies may occasionally review all previous available tax years to recoup missing R&D tax credit chances.

 

Our devoted R&D Tax Credit staff at Incencred has required skills and experience for your industry specific R&D Tax credits. In order to pinpoint areas where the R&D credit might be applicable, we will take a comprehensive examination of your operations and research and development procedures.

Research & Development Tax Credit helps in:

1. Reduce your payroll taxes up to $500,000 per year after passing of Inflation Reduction Act in 2022.
2. Reinvest in your early-stage business and concentrate on the important work.
3. Get credit for previous work and carry it forward from quarter to quarter.

Eligibility Criteria
Qualify 4 Part Tests

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Qualified Purpose

A new or better product or process, formulation, invention, software, or technique that results in improved performance, function, dependability, or quality must be the focus of the activity.

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Technological in Nature

Hard sciences like engineering, physics, chemistry, biology, or computer science are crucial to the activity.

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Technical Uncertainty

At the commencement of the project, there must be uncertainty over the project's ability to develop, method of developing, or proper design of a new or enhanced product or process.

Experimentation Method

Almost all of the tasks are carried out to reduce or eliminate technical ambiguity. Through modeling, simulation, methodical trial and error, or other techniques, this approach involves evaluating one or more alternatives.

Qualifying R&D Expenses

R&D expenses may be qualified for immediate expense in order to lower overall tax liability.

The following four categories may be qualified as R&D expenses:

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Salaries & Wages

W-2 taxable salaries for personnel working on R&D projects.Supplies

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Supplies

Supplies used to conduct research may qualify.

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Contract study

Subcontractor expenses can be eligible subject to contractual restrictions.

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Costs of Computer Leasing

Payments made for hosting new or improved softwares and cloud services can be eligible.

Case Study

Dream. Innovate. Implement.

Our extensive tax credit team is the finest in the industry. We cultivate smart ideas for start-ups and successful businesses in the industry. By adhering to the best practices, we provide next generation tax credit consultancy.

  • We provide free initial consultation to explore the tax credits eligibility.
  • We work with some of the most successful businesses in the industry and start-ups

Work Process

Submit a simple application
with details about your business.
Choose a company type and a state.

The first step is to decide in which state you want your business to incorporate in. Next, the legal entity type within that state. There are benefits to each choice and we've laid out some information below to help you decide. The most common option is an LLC incorporated in Delaware.

  • LLC. A limited liability company is an organizational business structures in the United States that helps business owners separate their personal liabilities from the business liabilities.
  • Delaware. The gold standard for startups planning to raise funding from angel investors and venture capital firms. Most Fortune 500 companies are incorporated in Delaware.
  • Wyoming. Great state for smaller, privately controlled companies. Extremely low cost, very manageable, and flexible as your company grows.
Submit a simple application
with details about your business.
Choose a company type and a state.

The first step is to decide in which state you want your business to incorporate in. Next, the legal entity type within that state. There are benefits to each choice and we've laid out some information below to help you decide. The most common option is an LLC incorporated in Delaware.

  • LLC. A limited liability company is an organizational business structures in the United States that helps business owners separate their personal liabilities from the business liabilities.
  • Delaware. The gold standard for startups planning to raise funding from angel investors and venture capital firms. Most Fortune 500 companies are incorporated in Delaware.
  • Wyoming. Great state for smaller, privately controlled companies. Extremely low cost, very manageable, and flexible as your company grows.
Submit a simple application
with details about your business.
Choose a company type and a state.

The first step is to decide in which state you want your business to incorporate in. Next, the legal entity type within that state. There are benefits to each choice and we've laid out some information below to help you decide. The most common option is an LLC incorporated in Delaware.

  • LLC. A limited liability company is an organizational business structures in the United States that helps business owners separate their personal liabilities from the business liabilities.
  • Delaware. The gold standard for startups planning to raise funding from angel investors and venture capital firms. Most Fortune 500 companies are incorporated in Delaware.
  • Wyoming. Great state for smaller, privately controlled companies. Extremely low cost, very manageable, and flexible as your company grows.
Testimonials
Alex Martin Envato Customer
Terry Figueroa Marketing Manager
Kaycee Hess Human Resources

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Awesome Works

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FAQ

Employee retention tax credit abbreviated as “ERC” is a retroactive refundable tax credit provided by the CARES Act in 2020 for supporting businesses to retain employees in  2020 & 2021.

Employers who were impacted as follows are eligible for ERTC:

1. full or partial suspension orders by the Government, or

2. Had significant decline in sales, or

3. Started business operations after 02/15/2020, or

4. Severely financially distressed employer

Employee retention tax credit (ERC) are not taxable but the employers are required to reduce wages declared on income tax returns for respective years for which Employee retention tax credit have been approved by the IRS. You will have to file an amended income tax return in most cases.

Employee retention tax credit (ERC) can be claimed until Q3 2021 for businesses other than recovery startups & severely financially distressed employer. If your business qualifies as recovery startups or severely financially distressed employer , then you can be eligible for Q3 2021 & Q4 2021 Employee retention tax credit (ERC).

The lawmakers passed Infrastructure Act (Bipartisan Law) to restrict the businesses from claiming Employee retention tax credit (ERC) beyond Q4 2021. There are no signs for ERC to be extended for 2022 despite businesses are still struggling to get back with normal operations.

Yes, Non profit organizations are equally eligible as other for profit businesses to claim Employee retention tax credit (ERC).

Yes, even if you incorporated or started your business operations in 2020, you are still eligible for Employee retention tax credit (ERC) under normal eligibility route or recovery startup business.

Yes, employers who have availed PPP loan forgiveness are still eligible for Employee retention tax credit (ERC). However, no double dipping of payroll costs as declared on PPP loan forgiveness applications.

As per Constructive ownership rules, owners having more than 50% interest in the business are not eligible for Employee retention tax credit (ERC). However, other non related employees can still be eligible for Employee retention tax credit (ERC)

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