![](https://cdn.prod.website-files.com/6541ccfaade2faf55bd92cff/656fa75ddfd426cdc7497b09_64957c894efdd0ac727f7acb_Rectangle%2018%20(2).png)
The R&D tax credit can benefit a wide variety of businesses from many industries, including startups, manufacturing firms, technology companies, financial companies, software development businesses, and many more. The R&D tax credit enables businesses to increase cash flow and savings, reduce the Federal income tax rate, and receive Federal and State dollar-for-dollar income tax reductions.
Businesses That Can Benefit From the R&D Tax Credit
Many businesses can potentially offset up to $500,000 in payroll tax liability for qualifying activities.
Startups
Startup businesses are able to claim and benefit from the R&D tax credit. As long as a business has 5 years or less in revenue, has $5 million or less in revenue in the current year, and conducts qualifying research activities, it is eligible for the credit.
![](https://cdn.prod.website-files.com/6541ccfaade2faf55bd92cff/669044944658f4de277855ea_iStock-1485933260.jpg)
Common Challenges When Claiming R&D Tax Credits
Although claiming this credit can offer considerable benefits for companies engaged in R&D efforts, the process can be challenging.
![](https://cdn.prod.website-files.com/6541ccfaade2faf55bd92cff/668d875829e3495f02ba8a2b_pexels-mikael-blomkvist-6476254.jpg)
No Profits, No Problem: R&D Tax Credits Can Help Your Startup
Running a startup is all about innovation and making the most of your resources. But what if you're not yet turning a profit?
![](https://cdn.prod.website-files.com/6541ccfaade2faf55bd92cff/66855b32dde8a851f1e4f54c_iStock-2022650788.jpg)
What Happens to Unused R&D Tax Credits?
What happens if you don’t use all your credits in a single year? Don’t worry! The US tax code has you covered.