The R&D Tax Credit stands as a federal incentive that enables businesses to lower their income tax liability in the current tax year and even secure a cash refund for taxes paid within the last three years.

Expanding its reach, several states have introduced their own versions of the R&D Tax Credit, allowing qualifying businesses to harness both benefits. The enactment of the Protecting Americans From Tax Hikes (PATH) Act marked a significant stride, rendering the R&D Tax Credit a permanent fixture while broadening its qualifications and enlarging the scope of eligibility. Furthermore, numerous qualifying small businesses can avail themselves of the Payroll Tax Credit to offset portions of their payroll tax obligations.

What’s often overlooked is that numerous everyday business operations might be eligible for dollar-for-dollar Tax Credits, regardless of industry or company size. To lay claim to the R&D Tax Credit, an activity must align with a comprehensive 4-part test designed to validate the research endeavor.