How to Calculate R&D Tax Credit: Exclusions & Guidelines

Demystifying Exclusions in R&D Tax Credit Calculations

The business tax credit for research and development is a specific form of federal tax credit that can be used by organizations to save money on their taxes. The credit applies to specific activities and expenses related to research and development, and is used by countless businesses across the US to minimize federal tax obligations. A more detailed overview is available on the IRS research credit webpage.  

R&D tax credits serve as a prevalent means for US-based companies to reduce their taxable income. However, to fully capitalize on the benefits provided by these credits, organizations must adhere to a host of regulations and fulfill specific requirements. Additional insights into the credit, as well as more info on how to calculate R&D tax credits, are available on our other R&D tax credit blog.

Research and Development Tax Credit Example Exclusions  

Here is a list of common activities that do not meet R&D tax credit qualifications:

Wrapping It Up

While R&D tax credits can provide substantial savings for businesses, it's crucial to know the exclusions and qualifications. If your company is considering claiming R&D tax credits and is still unsure how to calculate R&D tax credits with accuracy, we recommend consulting with a tax professional to ensure you take full advantage of the credit and adhere to the proper guidelines.

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