R&D Credits and Incentives
Research and development tax credits result in permanent tax savings for many types of businesses. RSM McGladrey has a team of specialists dedicated to helping companies increase the after-tax return on their R&D investment by taking advantage of the R&D credit and other related tax incentives.
To qualify for the credit, an activity must include the following elements:
- Permitted purpose. Activity is related to new or improved function, performance, reliability or quality.
- Elimination of uncertainty. Activities are intended to eliminate uncertainty concerning the development or improvement of a product or process.
- Process of experimentation. Systematic testing of alternatives and evaluation of results was conducted.
- Technological in nature. The research activity relies on principles of physical science, computer science or engineering.
Don’t overlook this opportunity
Your company may benefit from an R&D tax credit study if it engages in one or more of the following activities:
- Develop new or improved products
- Develop new or improved manufacturing processes
- Designing and fabricating tools and dies
- Development of production equipment
- Develop new or improved software applications
Companies in a variety of industries can qualify for the credit, including:
- Manufacturing
- High-tech (i.e.,semi-conductors, medical devices)
- Food processing
- Aerospace and defense
- Equipment and component parts
- Pharmaceuticals and biotech
- Architectural and engineering firms
- Energy and utilities
- Financial Services
Current environment
Traditional methods of quantifying costs associated with qualifying R&D activities have come under increased IRS scrutiny and the bar has been raised on documentation necessary to meet the “more likely than not” level of assurance necessary for FIN 48, Circular 230 and section 6694 preparer penalty compliance. Our R&D team is continuously updating its tools and processes to stay ahead of the curve and put our clients in the best position to claim and sustain R&D tax benefits.
Our R&D credit approach
An RSM McGladrey R&D Tax Credit Study includes a technical assessment and documentation of the qualified activities. Activities for tax years open under the statute of limitations are analyzed to determine eligibility and leading up to tax refund claims.
Our process is scalable to the size and complexity of the business. We perform an initial scoping process to determine the estimated costs and benefits of performing the study before either party commits to the project. R&D projects also undergo a quality assurance review by our National Tax office. Our project teams employ standardized processes and tools, supported by current technology.
Our Team
The national RSM McGladrey R&D team is composed of more than 60 R&D specialists and activities are coordinated on a national basis. Our professionals include technical personnel, such as engineers and software developers, as well as accountants, attorneys and former IRS specialists with significant R&D credit experience. Our team also has experience in large and small case IRS examination and appeals support.
