Research & Development Tax Credit
Navigate the R&D Tax Credit With Confidence
Accelerate Tax & Business Services delivers defensible R&D Tax Credit studies that align engineering innovation with IRS compliance standards, enabling businesses to maximize eligible savings while maintaining comprehensive audit protection.
29+
Years of Specialized Experience
10,000+
Completed Studies
100%
Audit-Free Track Record
Why Work With Accelerate?
Specialized R&D Tax Expertise
CPA-Aligned Credit Studies
Dedicated tax specialists and engineers align your documentation with IRS Form 6765 and Section 41/174 guidance, ensuring seamless integration with your tax preparation workflow.
Defensible Documentation
We produce clear technical narratives, comprehensive cost tie-outs, and audit-ready workpapers that translate engineering activities into qualified research documentation.
End-to-End Support
From initial discovery through final filing, we partner with your finance and engineering teams to maximize eligible credits while maintaining compliance standards.
Overview & Key Concepts
The R&D Tax Credit provides federal and state incentives for businesses investing in qualified research activities. These credits deliver dollar-for-dollar reductions in tax liability for companies developing new products, improving manufacturing processes, or advancing technical capabilities.
The PATH Act of 2015 made the credit permanent and expanded access for emerging growth companies and startups.
Qualifying Expenses Include:
- W-2 wages for qualified employees
- Supplies consumed in experimentation
- Contract research expenses
How to Claim
Implementation Path
The R&D Tax Credit is claimed by filing IRS Form 6765 with your federal return. Companies may amend prior open years (typically three years) to capture previously unclaimed credits. Qualified small businesses and startups may elect to offset payroll taxes.
Primary Benefits:
- Dollar-for-dollar federal tax reduction
- Federal and state credit availability
- Immediate cash-flow improvement
- Reduced long-term effective tax rate
Contact Accelerate
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Accelerate prepares comprehensive, defensible credit studies and provides strategic guidance on Section 174 capitalization requirements, state-level incentives, and payroll tax elections for emerging growth companies.
Qualification Criteria
The Four-Part Test
Permitted Purpose
Activities must seek to develop or improve function, performance, reliability, or quality of a business component.
Technological in Nature
Research must rely on principles of engineering, computer science, mathematics, or the physical or biological sciences.
Elimination of Uncertainty
Activities must seek to eliminate technical uncertainty regarding development, methodology, or appropriate design.
Process of Experimentation
Research must evaluate technical alternatives through systematic testing, modeling, prototyping, or iterative development.
What Counts
Qualifying Activities:
- Creating improved products, processes, formulas, software, and manufacturing techniques
- Automating or improving manufacturing processes and production efficiency
- Integrating new equipment, APIs, or technical systems
- Software, firmware, IoT, and data science development
- Prototypes, first articles, models, and technical simulations
- Evaluation of alternative materials and design approaches
Common Exclusions:
- Routine quality control or post-production technical support
- Market research, consumer surveys, or advertising activities
- Foreign research conducted outside the United States
- Research funded by grants or customers where you do not retain substantial rights
Industries We Serve
The R&D Tax Credit applies across a broad range of technical and engineering-driven industries.
Manufacturing
Software & Technology
Construction & Engineering
Healthcare & Medical Devices
Food Science & Processing
Energy & Clean Technology
Biotechnology & Pharmaceuticals
Industrial Automation
Aerospace & Defense
Specialty Materials & Chemicals
Common Questions
R&D Tax Credit FAQs
The R&D Tax Credit is a federal incentive that rewards U.S. companies for developing or improving products, processes, or technology. It provides a dollar-for-dollar reduction in tax liability and can be claimed annually. Many states also offer their own version of the credit.
Eligibility extends beyond traditional research laboratories. Businesses in manufacturing, software development, engineering, construction, healthcare, biotechnology, food science, and numerous other technical industries often qualify. If your company improves products, automates processes, develops technical solutions, or addresses engineering challenges, you likely meet the basic requirements.
Activities that seek to improve function, performance, reliability, or efficiency may qualify. Common examples include:
- Developing new products or technical features
- Creating or improving software applications and systems
- Prototyping and iterative technical testing
- Improving manufacturing processes and production methods
- Experimenting with new materials, tooling, or automation systems
Qualified Research Expenses (QREs) typically include:
- W-2 wages for employees directly involved in qualified research activities
- Supplies consumed during testing, prototyping, or experimentation
- Contractor or third-party research costs (at 65% of amounts paid)
- Cloud computing expenses directly related to qualified research
No. Improvements to existing products, processes, or systems frequently qualify. Enhancing product performance, updating internal software systems, reducing manufacturing defects, automating technical processes, or increasing operational efficiency can all meet IRS qualification criteria.
Yes. Qualified small businesses can apply the R&D Tax Credit against payroll taxes (up to $500,000 annually) even if they are not yet profitable. This payroll tax election makes the credit extremely valuable for early-stage companies with limited federal income tax liability.
Yes. Most companies can amend the three prior open tax years to claim previously unclaimed credits. Amended returns often produce immediate refunds or reductions of prior-year tax liabilities, improving cash flow and effective tax rates.
The IRS requires clear documentation connecting qualified activities to qualified costs. This includes technical project descriptions, wage allocation methodologies, supply documentation, and comprehensive financial tie-outs. Accelerate prepares complete, audit-ready documentation packages that satisfy IRS requirements and enable confident filing by your tax advisor.
The credit typically ranges from 5% to 15% of total qualified expenses, depending on calculation methodologies and company-specific factors. Many clients receive annual credits between $75,000 and $500,000. Software, manufacturing, and engineering-intensive companies often qualify for substantially larger benefits.
Most studies require 2–6 weeks to complete, depending on company size, project complexity, and documentation availability. Accelerate manages the majority of the documentation process to minimize time requirements for your internal teams.
A brief consultation is typically sufficient to assess eligibility. Our specialists review your technical activities, cost structure, and project documentation to estimate your potential credit and outline the engagement process.
Have additional questions about the R&D Tax Credit? Schedule a consultation and we'll review your projects for eligibility and estimated benefit.
Schedule Consultation →Ready To Maximize Your R&D Tax Credit?
Schedule a complimentary R&D Tax Credit assessment. Our specialists will evaluate your eligibility, estimate your potential credit, and prepare comprehensive, defensible documentation for year-over-year claims.