Small — Mid-Sized Fabricators’ Misconceptions = Missed Tax Savings
MOST fabricators aren’t fully benefiting from the R&D tax credit because of common misconceptions about the applicability to their operations. Businesses that fail to claim the R&D tax credit often do so because of confusion around four key topics:
- Which activities qualify as research
- What expenditures qualify for the credit
- What documentation sufficiently supports research
- How businesses use the credit
- Gaining clarity around these topics can provide the foundation for identifying and claiming the R&D tax credit—and lowering a company’s tax burden.
Here’s the Reality – Fabricators of ALL sizes QUALIFY:
- Research is NOT Just Lab Coats! Improvement is Research.
- Any fabricator that encounters and resolves technological challenges may be eligible for the R&D tax credit. That said, eligibility depends largely on whether the work a company does meets the criteria established by the IRS’s four-part test:
- Elimination of uncertainty. A company must demonstrate it has attempted to eliminate uncertainty about the development or improvement of a product or process.
- Process of experimentation. A company must demonstrate—through modeling, simulation, systematic trial and error, or other methods—that it has evaluated alternatives for achieving the desired result.
- Technological in nature. The process of experimentation must rely on the hard sciences, such as engineering, physics, chemistry, biology, or computer science.
- Qualified purpose. The purpose of the research must be to create a new or improved product or process, resulting in increased performance, function, reliability, or quality.
Join us for our free webinar –
Tax Breaks for Fabricators: What You Need to Know
Thursday, February 28, 2019
Hosted by: SigmaTEK’s Bill Huffman & AlliantGroup’s Greg Knarr.
Register today and invite your accounting and operations personnel.