Global Payments

January 11, 2023

3 mins

Maximizing R&D Tax Credits: 5 Reasons Why US Companies Should Take Advantage

R&D tax credits are a government-backed initiative designed to spur innovation and support companies investing in research and development (R&D). Companies in diverse industries, including technology, manufacturing, and healthcare, are eligible to receive these tax incentives. Here are five compelling reasons why US businesses should consider R&D tax credits.

Five compelling reasons why US businesses should file for R&D Tax Credits:

  1. Lower the cost of innovation - R&D tax credits reduce the financial burden of investing in innovative ideas and technologies by providing a credit against taxes owed.
  2. Maintain competitiveness - By investing in R&D, companies can stay ahead of the curve and retain a competitive edge in their industry. R&D tax credits make these investments more manageable.
  3. Drive job creation and economic growth - Companies that invest in R&D frequently create new jobs and boost the economy. By incentivizing more R&D investment, R&D tax credits can help spur job creation and stimulate economic growth.
  4. Accessible to businesses of all sizes - R&D tax credits are available to companies of all sizes, including small startups and large corporations. No business is too small to benefit from this tax incentive.
  5. Simple to claim - The process of claiming R&D tax credits is straightforward, with many resources available to guide companies through the process.

If you’re a US company interested in getting R&D tax credits, here’s how to start:

  1. Determine if your company is eligible: To be eligible for R&D tax credits, your company must be engaged in qualified research activities. This includes activities that involve developing or improving products, processes, techniques, or software. You can get a free consultation with Niural here.
  2. Gather documentation: To claim R&D tax credits, you’ll need to gather documentation that supports your claim. This may include things like research plans, technical reports, and documents that show how you conducted your research.
  3. Calculate your credit: To calculate your R&D tax credit, you’ll need to determine the amount of qualified research expenses you incurred during the tax year. There are various methods you can use to calculate your credit, depending on the size of your company.
  4. File your claim: Once you’ve gathered your documentation and calculated your credit, you’ll need to file a claim with the IRS. You can do this by filling out Form 6765 and including it with your tax return. You can also use Niural for help with filing.

R&D tax credits can be a valuable resource for companies looking to invest in innovation and stay competitive. By following these steps, you can start getting R&D tax credits and take advantage of this valuable tax incentive.


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