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R&D Tax Credits by Industry

From orthodontics to wound care: the activities that qualify for R&D Tax Credits may surprise you

The research and development (R&D) tax credit was created to incentivize companies in numerous industries to keep innovative jobs here in the United States. See our industry-specific pages to learn more about qualification criteria – what your company is working on right now may be eligible for significant tax breaks.

Dental Care

Dentistry is rapidly adopting technology, such as digital imaging and CAD-CAM labs. Clinicians need to develop protocols, train staff, and evaluate efficacy, all of which require significant R&D investments.

Medical Practices
Medical Record Analysis

Bringing new procedures into your practice requires workflow, design, training, and case outcome evaluations – often with little clinically recognizable guidance. These steps all require significant investments in R&D

Software and Other Activities

Most stages of the software development process qualify as R&D, and software companies recoup some of the highest of their R&D expenditures compared to other industries. Planning, creating, improving, testing, and implementing are all qualifying activities

  • How do I know if my practice or lab does R&D?
    If you own a practice or lab, odds are you regularly engage in streamlining your processes and upgrading your equipment. Your practice has wage or other expenses related to the development of new or improved products and likely has qualifying R&D activities.
  • Why haven’t I heard of this?
    Many companies were not eligible to receive a current benefit until the PATH Act was passed in 2015. And once passed, not a lot of companies heard about it. Even companies that did know about it failed to pursue it, due to complexity and time constraints. We offer a solution that focuses on healthcare, simplifies the process, and maximizes ROI.
  • What’s the benefit?
    Simply put, the R&D tax credit creates money that goes back in your company’s pocket to fuel further innovation and growth. Estimate your R&D credit with our quick calculator. Typically 7-16% of qualified expenditures, the credit can be used to offset: Income taxes if you are in a taxable position. Alternative Minimum Tax (AMT) if you have less than $50 million in average revenue for the 3 preceding years from the tax year, and you owe AMT in the current year. Employer portion of social security taxes up to $250,000 each fiscal year, allowing qualified small businesses to receive the benefit regardless of profitability.
  • Do I receive money one time or every year?
    You receive money every year you are eligible.
  • How has the R&D Tax Credit expanded over the years?
    Since it was first put in place in 1981, the R&D Tax Credit has gone through a gradual evolution over time, with new legislation, regulations and judicial precedent expanding the number of businesses that can benefit from the credit and the savings that can be accrued through this incentive. The most impactful changes have actually occurred within the last two decades. In 2003, the Discovery Rule was removed, meaning that research activities no longer had to be “new to the world”, but instead “new to the taxpayer” – a standard that is much more favorable to taxpayers. In 2015, the Protecting Americans from Tax Hikes (PATH) Act not only made the R&D Tax Credit permanent, it modified the credit for the benefit of small and mid-size businesses and opened up its availability to startups.
  • Can the R&D Tax Credit be used to offset the Alternative Minimum Tax?
    As a result of the PATH Act, “eligible small businesses” (defined as businesses with an average of $50 million or less in gross receipts over the past three years) may claim the federal R&D Tax Credit against their Alternative Minimum Tax (AMT) liability beginning in 2016. Additionally, as a result of the Tax Cuts and Jobs Act (TCJA) of 2017 removing corporate AMT and loosening individual AMT restrictions, the credit has become further accessible to U.S. businesses.
  • How does the R&D Tax Credit’s “Startup Provision” Work?
    Startups and small businesses may qualify for up to $1.25 million (or $250,000 each year for up to five years) of the federal R&D Tax Credit to offset the Federal Insurance Contributions Act (FICA) portion of their annual payroll taxes. To be eligible, a company must: - Have less than $5 million in gross receipts for the credit year - Have no more than five years of gross receipts
  • How does pricing work?
    Our pricing is built to fit your business and designed to reflect the efficiencies of our process. Practices pay a small base fee plus a percentage of their credit. For new practices, we offer a special pricing option.
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