The Research Tax Credit (RTC) is a generous incentive program that rewards companies of any size for conducting Research and Development activities in the United States. The credit is a dollar for dollar reduction of federal taxes owed. The majority of states also offer a similar incentive based on the federal criteria.
In December of 2015, the RTC was made permanent legislation under the PATH ACT. Historically, many companies fail to make an RTC claim because they falsely assume that the program is restricted to “High Tech” companies. The fact is that virtually any company may have qualified research activities (QRAs) at any given time. In general, if some of your staff are engaged in solving technological problems for which a solution is not readily apparent, there is a good chance that the work they are doing is fully or partially eligible.
The definition of research and development in the tax world is not the same as in the world of science. In general, qualified research activities can include designing, developing or improving a ‘business component’ (i.e. product, process, technique, formula, invention, software). Once QRAs are defined, the associated qualified research expenses (QREs) must be determined. This includes employee wages, material or contractor costs, and prototype component costs that have been incurred during the development or improvement of the business component. The final requirement is to demonstrate the ‘nexus’ between the QRAs and QREs through supporting corroborative records.
DST has a unique value proposition comprised of our approach, our people, our framework methodology and our cost.
Science trained consultants with industry experience.
This experience enables the exercise of identifying qualified research activities and structuring your R&D claim profile efficient and effective. This leads to overall less time to interact with operational staff.
Keen interest for the technical development work.
We not only understand it, but we also enjoy engaging in the science and engineering fields. This enthusiasm is felt by the Client and motivates them to tell us their story. At the same time, it assures the Client’s personnel that they will not be wasting their time explaining their work to us, as we have the background to grasp it.
Understanding that it is key to minimize disruption in the Client’s daily operation.
In that we have all been on the other side – in industry. We understand that the key is to minimize their time and effort during the information collection process and so we are willing to review their existing documentation for the facts needed or offer our custom designed templates to efficiently extract the information.
Custom templates that are dual-purpose.
Our templates and tools become the Client’s supporting claim documentation which has been well-proven in audits and at the same time offer us the information we need to draft the project descriptions.
Conservative yet fair in our assessment of eligibility.
With over 25 years of combined experience, we are very familiar with the eligibility requirements of the RTC program. As a result, we have a very high claim approval rate among the review/examination audiences (i.e., our client’s auditors/tax return preparer and the IRS).
Single focus service.
We offer a single focus service line, allowing us to commit the necessary focus, and often-times creativity, in servicing our clients. We are not distracted by other tax related services offerings or responsibilities. We are the dedicated experts.