Can I Claim R&D Tax Credits in Rhode Island?
Yes, you can claim R&D tax credits in Rhode Island. The state offers a research and development tax credit program known as the Research & Development Expense Credit.
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The Research and Development Tax Credit (R&D) is a tax credit accessible to businesses of all sizes conducting research and development in the United States. This credit is not limited to scientists and research labs; it is applicable to a wide spectrum of businesses and industries. The R&D tax credit was established to encourage research and development conducted within the United States. Over time, an increasing number of companies have been utilizing this credit. Furthermore, the Protecting Americans from Tax Hikes (PATH) Act, enacted in 2015, made the R&D tax credits permanent and expanded the eligibility to include startups.
What are the Potential Benefits of the R&D Tax Credit?
Qualifying companies can save significantly by claiming R&D tax credits. These benefits include:
- Increasing Cash Flow
- Federal and State Dollar-for-Dollar Income Tax Reduction
- Claim Credits for Open Tax Years Going Back 3-4 Years
- Reducing Your Tax Rate
$1.6 BILLION
Who Can Claim the R&D Tax Credit?
The misconception that R&D tax credits are limited to scientists and groundbreaking products is misleading. In reality, these credits have a much broader scope and impact than commonly believed.
Companies in a wide range of industries and of all sizes are eligible for Research and Development (R&D) Tax Credits. Surprisingly, many of these companies are not even aware that they qualify. It's a missed opportunity for thousands of companies who are leaving money on the table by not taking advantage of substantial federal and state R&D tax credits. Don't be one of them. Find out if your company is eligible and start benefiting today.
The activities eligible for the R&D tax credit are the exact ones fueling your business's growth.
- Developed new products
- Improved existing products
- Developed software for internal or external use
- Improved manufacturing processes
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The activities that qualify for the Rhode Island R&D tax credit are the same ones driving growth in your business.
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10,700
How Do I Claim the R&D Tax Credit?
Companies can potentially claim up to 7-10% of their qualified expenses as a federal R&D tax credit. For instance, a software developer, engineer, or lab technician earning $100,000 a year could save up to $10,000 in taxes.
Expenses eligible for research activities within your company typically encompass employee compensation, materials, and contracted services. There are several types of documentation that can substantiate these qualified expenses, such as payroll records, financial records indicating supply or contract research expenditures, and vendor invoices.