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R&D TAX CREDIT:

Reduce Your Taxes for Performing Technical Work

The R&D Tax Credit is the Largest Federal Tax Incentive for Businesses

The Research and Development (R&D) tax credit encourages US companies to conduct qualified activities within the United States. Specifically, the incentive reduces the taxes of businesses who develop or improve products, processes, techniques, formulae or technologies.

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Calculate Your Potential
R&D Credit Amount

Enter in your annual wages paid to employees below to see your estimated credit amounts.

* Subject to changes based on contractor expenses utilized, raw material expenses, & rental/lease costs of computer space

** This estimate is in no way a warranty or guarantee of a realized monetary benefit due to you. This is only an estimate based on our experience with the R&D tax credit.

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R&D TAX CREDIT:

What is theR&D Tax Credit?

The R&D tax credit is a special tax incentive that recognizes businesses for developing or improving products or processes, regardless of industry. This tax credit equates to a dollar-for-dollar reduction in tax liability, and it is accepted in 38 states. Based on your qualified wages, supplies and third-party costs, the credit offers an additional source of liquidity to jump-start new development efforts. Many companies are eligible to recover significant tax overpayments while offsetting future tax liability; since, the credit can be claimed retroactively for 3 to 4 years depending on the state.

What is the R&D Tax Credit?
R&D TAX CREDIT:

How it works?

Our experts work closely with your team to maximize your credit potential every year.

step 1 identification and discovery

Step 1:Identification & Discovery

Our team conducts a full analysis of your business and operations to identify qualified projects and determine what can be claimed toward the R&D credit.

step 2 quantification

Step 2:Quantification

Working alongside your CPA and accounting staff, we gather and review expense-related data to quantify your business's eligible benefit.

step 3 qualification review

Step 3:Qualification Review

We take a deep dive into the qualifications for each project, conducting interviews and gathering documentation to verify each expense.

step4 substantiation and report

Step 4:Substantiation & Report

Once the credit is calculated and substantiated, we work with your team to facilitate a seamless tax filing process, including the preparation of an executive report and audit-related support should your claim ever be reviewed.

step 5 maximize annually

Step 5:Maximize Annually

We partner with clients to identify existing tax credits and to recommend and implement procedural changes within your organization to help you maximize your benefit year after year.

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do you qualify
R&D TAX CREDIT:

Do you qualify for theR&D Tax Credit?

The IRS utilizes a 4-part test to identify eligible projects. To qualify, your activities must:

  • Develop or improve products, business processes, or techniques

  • Undertake a process of experimentation or trial and error

  • Attempt to solve a technical uncertainty

  • Rely on sciences such as engineering, biology, chemistry, or computer science.

Think your research doesn't qualify?Think again!

The R&D Discovery Rule

To qualify, your company does not need to make groundbreaking discoveries that change the world. Rather, your business must only resolve technical issues that are unknown for the company itself.

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R&D TAX CREDIT:

Why apply for the R&D Tax Credit?

The IRS utilizes a 4-part test to identify eligible research. To qualify, your Research and Development activities must:

  • Keep more of your profits

  • Reduce federal and state tax liability for past, current and future years

  • Carry excess credits forward to offset future liabilities.

why apply for the R&D tax credit

Does the concept of R&D make you think of science labs and drug companies?

If so, you may believe your company does not qualify for the annual R&D tax credit and miss out on taking advantage of this valuable savings tool. The good news is that the R&D tax credit is available to a much wider range of industries. Here are just a few of the industries that qualify for the R&D tax credit if they are doing technical work:

manufacturing
Manufacturing
software
Software & Technology
biotech and pharma professional services
Biotech & Pharma Professional Services
construction
Construction
engineering
Engineering
agriculture
Agriculture
wineries
Wineries
breweries
Breweries

Frequently asked Questions

Do you have any other questions?

Call us at (888) 305-1120 if you have any further questions and we'll be glad to help!

Any company that conducts qualified technical activities with an iterative trial-and-error process may be eligible for the R&D credit. Businesses in the following industries are typically eligible:

Manufacturing, processing, software, technology, engineering, product design, biotech, life sciences, aerospace, pharmaceuticals, medical device makers, and oil & gas.

If your company is in one of these industries and conducts technical activities, contact us to determine if your activities may qualify.

Many commonly-performed technical activities may qualify for the R&D tax credit beyond those of white-coat laboratories. Many businesses eligible to claim the R&D credit fail to claim it because they underestimate the scope of qualifying technical activities. Your company likely conducts qualifying technical activities if you:

  • Develop consumer products
  • Develop software or apps
  • Develop new processes or techniques to make products
  • Improve the performance, functionality, quality, or reliability of existing products or processes
  • Evaluate product prototypes
  • Test alternatives to existing products or processes
  • Conduct research intended to speed up time-to-market
  • Implement new automation processes
  • Implement process improvements that reduce waste, reduce costs, or increase efficiency
  • Develop or improve formulas for food, beverage, or chemicals
  • Create patentable products or processes

There is no ceiling on the tax money your business can save by claiming the R&D tax credit. The amount of your business' R&D credits is determined by the scale and expense of your qualifying technical activities — the more you spend on R&D, the more money you can save. Most businesses save roughly 10% of their eligible R&D costs, and many large corporations save millions of dollars each year.

Expenses that may qualify for the R&D Tax Credit include employee wages or salaries, consultant fees, material/supply costs, and rented cloud server space for dedicated testing environments. The expenses must be directly related to research and development projects conducted in the USA to qualify. Expenditures made in foreign countries are not eligible.

The R&D credit is typically used to offset federal income taxes. If the credit is not fully utilized in the tax year it was generated, R&D credits can be carried backward one year to generate a tax refund. If there is still excess credit, it can then be carried forward for up to 20 years. Small startup businesses that are not profitable can potentially apply the credits toward federal payroll taxes. These Qualified Small Businesses may be eligible to offset up to $500,000 of payroll taxes each year for up to five years, or a total of $2.5 million.

Omega Accounting Solutions

Omega Accounting Solutions is not just another tax credit expert — we equip small business owners with big-business resources: empowering strategic decision-making through business intelligence, fractional accounting, and analytics. We fuel your growth with honest and insightful reports that help refine your business plan, boost efficiency, and maximize your tax credits. With significant savings in tax incentives secured for our clients nationwide, our experienced team has served a wide range of industries. Founded in 2007, Omega is committed to helping small businesses thrive.

How Omega Differs

At Omega, we don't just engage with customers, we build lasting relationships. Our team will continue to work with you year after year to recoup the maximum credit for your efforts. As an ongoing partner, we help your team create internal processes to capture all qualified expenses and offer suggestions and support to take full advantage of the R&D incentive.