R&D Tax Credits

What are R&D Tax Credits?

The R&D Tax Credits are an incentive available for US-based companies which allows for a corporate tax reduction proportionate to their eligible R&D expenditure in a given accounting period. This offset can be claimed against both the federal and state income tax liability. The R&D tax credits are not limited to large companies only – any company that develops new products, processes, software, applications or works on upgrading and improving existing ones is likely to qualify.

Over the years, California has expanded its R&D tax credits landscape to make it more attractive to businesses. As such, the California R&D Credit reduces income or franchise tax and are permanent. In order to qualify, the activities must take place within the state borders. As with the federal credit, the calculation in California is based upon the excess of California QREs over a base amount.

How does it work?

R&D Tax Credits grants are normally processed by the company’s accountant, financial advisor, or CFO, however, by working with us, clients maximise their chances of success. Our highly qualified team of consultants in science, engineering, software, tax and accounting works in tandem with the client’s team to discover unique areas of opportunity that often go unnoticed within the scope of individual research. As part of our process, we look to identify the extent of the qualifying R&D expenditure for each client and decide on the most optimal categorisation as either Core or Supporting R&D for the purposes of their claim, help to evidence progress, define the hypotheses your projects assumed, show the exact progression of a systematic approach as well as calculate the right expenditure amounts which are all crucial elements that the funding bodies look at when reviewing applications.

Oftentimes, we find that devil’s in the details – and even a small change in wording can go a long way. Our methodology is designed to pre-empt any post-submission questions that may arise in relation to a client’s claim. With a turnaround time of 3-4 weeks and one of the highest success rates in our field, BourkeHood uplifts claims for dozens of companies and ensures companies get the maximum net benefit to reinvest back into your business.

Assessing Eligibility 

Part of our process, BourkeHood will assess your business activities in terms of their eligibility for R&D tax credits, part of the Technical Discussion with our consultants which takes place immediately after coming on board with us. This is part of our free service, meaning if we find there isn’t enough R&D activity and expenditure to proceed with the claim, no fees will be due to us. In other words, we shake hands and close the contract at zero cost. Many of our clients found this Technical Discussion to be a valuable ‘checkpoint’ for their business to understand where they’re at in terms of their R&D scope and understand its definitions, even if they were unable to proceed with us with their claim.