Research & Development Tax Credit

One of the Most Lucrative Tax Credits Available for Business

Encouraging innovation in businesses across the United States.

The U.S. tax court and states alike have ruled in favor of business activities that make jobs faster and more efficient. This could be anybody from a contractor who uses new materials to create green, energy efficient improvements, to a manufacturer improving production processes through investment in new technology.

The R&D tax credit is now available to any U.S. business that spends time and resources on new development, improvements, or technological advancements in effort to improve upon its products or processes. The credit could also be available to American Business owners that have improved upon the performance, functionality, reliability, or quality of existing products or trade processes.


“Too often small and medium businesses just simply are not taking advantage of the R&D… 90% of life is just showing up. The same is true with tax. Business owners should learn about the tax incentives available for you. These incentives can help your business succeed and thrive.”

 – Senator Chuck Grassley, speaking about the R&D tax credit
Hear the full speech.

R&D Tax Recovery Qualifications

What might qualify?

  • Wages paid to employees for qualified services

    This includes amounts considered to be wages for federal income tax withholding purposes.

  • Basic research payments

    Payments made to qualified educational institutions and various scientific research organizations, allowable up to 75% of the actual cost.

  • Supplies

    This may include any property not subject to depreciation used and consumed in the R&D process.

  • Third party contract expenses

    This includes expenses for performing QRAs on behalf of the taxpayer, regardless of the success of the research, allowable up to 65% of the actual cost.

Who qualifies?

The R&D tax credit may apply to any taxpayer that incurs expenses for performing Qualified Research Activities (QRA) on U.S. soil. The credit is a percentage of qualified research expenses (QRE) above a base amount established by the IRS in a four-part test:

  • Elimination of Uncertainty

  • Process of Experimentation

  • Technological in Nature

  • Qualified Purpose

Qualifying Industries

Animal Hospitals
Biotech/Life Sciences
Civil Contractors
Coatings and Adhesives
Commercial Bakeries
Dental Practices
Food Processors
Food Products
Furniture Makers
Jewelry Design
Job Shops
Medical Devices
Oil and Gas Refineries
Package Design
Plastic Injection Molding
Real Estate Agencies
Research and Development Facilities
Staffing Agencies
Tool and Die

Forbes Insurance Services, Inc.