R&D Tax Credits

The Research and Development (R&D) Tax Credit is a tax incentive offered to companies who create or improve a product or process in the course of their business.

The Research and Development (R&D) Tax Credit is a tax incentive offered to companies who create or improve a product or process in the course of their business.

The R&D tax credit results in a dollar-for-dollar reduction in a company’s tax liability for certain domestic expenses. Qualifying expenditures generally include the design, development, or improvement of products, processes, techniques, formulas or software.

Is my Business Eligible for the R&D credit?

See If Your Business Qualifies:


The Federal R&D tax credit is available to US businesses that develop or improve new products, processes, software, formulas, or business components. Additionally, over 30 states offer R&D credits to offset state tax liability. 

The R&D credit originally only applied to a few highly technical companies. When the credit was made permanent by the PATH ACT of 2015, the definition of the credit expanded, allowing a wider range of businesses and industries to qualify for this significant valuable federal tax credit.

Examples of Qualifying Industries:

●     Automobile
●     Architecture & Engineering
●     Aerospace
●     Brewery
●     Chemical & Formula
●     Construction
●     Dental
●     Engineering
●     Fabrication

●     Food & Beverage
●     Foundry
●     Hemp
●     Life Science
●     Machining
●     Manufacturing
●     Software Development
●     Tool & Die Casting
●     Winery & Vineyard

Qualifying for the R&D Credit is a four-part test.

Companies that may not consider themselves innovative might be surprised to learn that they may qualify for the R&D Tax Credit when they look over the four-part test that determines eligibility.  

● Qualified purpose: Development undertaken to create new or improved business components. These business components could be products, software, techniques, processes, or formulas. 

● Elimination of uncertainty: Your company has to demonstrate that it tried to learn something new about the product being changed and that the product or process could not be improved without the research conducted. 

● Process of Experimentation: Your company has to prove that it under took different research alternatives to achieve the desired result. For example, trying different technologies, methodologies, and simulations. 

● Technological in Nature: Companies must be involved in the experimentation of the hard sciences such as engineering, physics, chemistry, biology, or computer science

Not sure if you qualify? ETaxBreaks Is Here To Help

We understand that understanding and applying for the R&D Tax Credit may feel daunting. The important thing to remember is that you won’t be alone.

Our tax credit experts will be there with you every step of the way, to walk you through the process and help you prepare all the necessary documentation.

If any complications should arise, you can count on us to be there by your side.

See If Your Business Qualifies