Research and Development (R&D) Tax Credit 

The Research and Development (R&D) Tax Credit is a government-backed incentive that encourages businesses to invest in innovation, product development, and process improvements by offering a reduction in tax liabilities. It allows companies to claim credits for eligible expenses incurred while conducting qualified R&D activities. 

Eligible R&D activities might include: 

• Developing new products, services, or processes. 

• Improving existing products or systems. 

• Software development. 

• Prototyping and testing. 

Qualified expenses typically include: 

• Employee wages related to R&D. 

• Supplies used in R&D processes. 

• Third-party contractor fees. 

Businesses can claim the credit against federal and, in some cases, state taxes, reducing cash outflows and enhancing financial viability for innovation-led enterprises.