5 Factors to get Tax Credit
In the United States of America, state and federal agencies provide millions of dollars of assistance to companies that are involved in qualifying research. The research & experimentation tax credit is generated by credits leveraged by companies. To make sure that research and development works continue to run smoothly, it becomes imperative for these agencies to maintain a cash flow. This is done through a systematic way through which every company that applies for a credit has to fulfill certain criteria.
As getting research & experimentation tax credit certainly boost the prospect of a company's R&D operation. So, undoubtedly a good number of companies from various sectors apply for these tax credits. Thousands of companies across the United States make a great effort to get these tax credits every year. Some of the key sectors that regularly benefit from this tax credit are Architecture, Food Science, Engineering, Automobile, Tool & Die Casting, Software Development and Pharmaceutical etc.
Considering the amount of money involved in the entire research & experimentation tax credit, it remains a challenging task for companies to dig out finances from federal agencies. Usually, they have to fulfill certain norms to get the money. Companies should qualify for tax credits from the beginning of their operations to the final phases of development.
Here’s a list of 5 qualifying factors that a company has to fulfill so as to be eligible for the research & experimentation tax credit:
• must develop a new product, process, formula or software
• Must develop experimental models & prototypes
• Involve in Beta testing
• Maintain research equipment
• Experiment with new technologies
By doing the basic research, companies who are applying for the very first time also can get a fair idea about how to proceed for research and experimentation credit for optimum gains.