Research & Experimentation Tax Credit

The research and experimentation (“R&E”) tax credit was created to encourage domestic research and experimentation activities.  It is applicable to a broad range of industries and activities. The Emergency Economic Stabilization Act of 2008 reinstated the R&E tax credit and extended it through 2009. Many states also have their own R&E tax credits for qualifying work performed within the state. The credit is based on three types of payments:
  • Qualified research expenses - certain expenses for product, process, software development and improvement activities.
  • Payments to qualified organizations for research.
  • Payments to energy research consortia for energy research.

If your business has activities related to the development or improvement of products, software, manufacturing or other processes, techniques, formulae or similar activities, now is the time to assess whether your business is taking full advantage of this valuable incentive. Because R&E tax studies are coming under increasing IRS scrutiny, it is essential to have a thorough and well documented credit study to withstand audit.

For more information or to discuss if you are eligible for this credit, contact Michael Silvio, Raj Rajan, or your local CBIZ MHM office.