Are you taking advantage of the Research & Development Tax Credit? As one of the largest and most broad corporate tax credits available, there’s a good chance your business qualifies. Our R&D Tax Credit Services Team can determine your organization’s eligibility and maximize the amount of savings you can receive.
The Research & Development Tax Credit is one of the largest dollar-for-dollar federal and state corporate tax benefits in the Internal Revenue Code. Over 30 states offer R&D credit, and businesses are eligible if they participate in activities involving the design, development, and improvement of products, software, or processes. There’s no limit on the amount that can be claimed on each return, and the credit can be back-dated to the previous year or rolled-over to the following year.
R&D Tax Credits can be rewarded for many tasks being performed by all types of taxpayers, including but not limited to: Life Sciences, Aerospace and Defense, Banking/Insurance, Retail, Manufacturing, Financial Services, Small Tech start-ups, etc. To be eligible for the R&D tax credit, companies must meet these minimum qualifications, even if they are not taxable:
The R&D Tax Services Team specializes in determining your full eligibility through an R&D Tax Credit study —a careful analysis that looks at qualifying activities and expenses.
An R&D Tax Credit study involves generally 2 main areas:
Uncovering this data for specific taxpayers is a unique skill that should be performed by qualified tax professionals. Our R&D Tax Credit team has performed R&D studies (as well as supporting those claims on audits) for all industries, and have been battle-tested in all types of client and IRS environments.
In order for an activity to qualify for the Research and Development Tax Credit, it must meet each part of the follow 4-part test:
1. Technological in Nature Test
2. Permitted Purpose Test
3. Technical Uncertainty Test
4. Process of Experimentation Test
Computer Software developed for internal general and administrative functions are subject to three additional “high threshold of innovation” R&D credit tests.
1. Innovation Test
2. Significant Economic Risk Test
3. Commercially Available Test
The R&D tax credit under IRC §41 is a statutory tax incentive, not a discretionary benefit, designed to reward companies for investing in innovation in the United States. While the opportunity can be significant, the credit is highly technical and documentation driven. At Withum, we believe the quality of an R&D tax credit study should…
A recent shift in federal policy materially changes how certain cannabis businesses should evaluate their Research and Development (R&D) Tax Credit position. On April 22, 2026, the Drug Enforcement Administration (DEA) issued a final order rescheduling specific cannabis products from Schedule I to Schedule III under the Controlled Substances Act. This change applies primarily to…
The Research and Development (“R&D”) tax credit under Internal Revenue Code (“IRC”) §41 is a statutory tax incentive, not a discretionary benefit. During an audit, the Internal Revenue Service (“IRS”) does not evaluate whether a taxpayer’s work “looks innovative”. Instead, examiners apply a structured, statute driven analysis grounded in §41, the Treasury Regulations, and the…
For more information or to discuss your business needs, please connect with a member of our team.