(513) 858-6040 
Secure File Upload
Pay
Client Center
Which Research Activities Qualify for the Qualified Small Business Tax Credits
Jul 17, 2017
Which Research Activities Qualify?
If your small business engages in research activities, you may be eligible for research credits on your tax bill. A business must have engaged in “qualified” research activities to be eligible for the research credits. A “qualified” activities must meet the following four-factor test:
1. The purpose of the activity must be to create new (or improve existing) functionality, performance, reliability or quality of a product, process, technique, invention, formula or computer software that will be sold or used in your trade or business.
2. The intention of the activities for your new product or service must be to eliminate uncertainty.
3. There must be a process of experimentation where your process includes trial-and-error testing.
4. The process of experimentation must fundamentally rely on principles of physical or biological science, engineering or computer science.
Expenses incurred by your business that may qualify for research credits include:
- wages for time spent engaging in supporting, supervising or performing qualified research
- supplies consumed in the process of experimentation
- 65% of any contracted outside research expenses
If you think your business has activities that meet the four-factor test which qualifies you for research credits, contact Kirsch CPA Group at (513)858-6040. We will help you make the election for your business (or amend your business’s 2016 federal income tax return, if necessary) and help your business take advantage of research credit.
About The Author
As the Manager of Practice Growth, Diane focuses on the market awareness and growth of Kirsch CPA Group…
Sign Up for Email Updates
Related Articles
Does your Business Deduct Research & Development Expenses? Major Changes Impact 2022 Taxes…
- 11-09-22
- Elizabeth Michalak
Why Have Your Financial Statements Reviewed (Even When Not Required)
- 10-17-22
- Kirsch CPA Group
Case Study: Strategic Accounting Support from Acquisition to Sale
- 09-20-22
- Kirsch CPA Group
Prevent a Poorly Structured Chart of Accounts from Hiding Your Profitability
- 01-06-22
- Nick Roell
Entrepreneurial Mindset: Kirsch CPA Group Sets a Framework for Growth
- 10-28-21
- Kirsch CPA Group
What Your Numbers Are Saying: Are You Listening?
Part 2: How Attractive Is Your Balance Sheet?
- 07-19-21
- Kirsch CPA Group
What Your Numbers Are Saying: Are You Listening?
Part 1: Do You Know Your Profitability?
- 06-09-21
- Kirsch CPA Group
Using Cash Flow Forecasting to Avoid Problems & Grow Your Business
- 04-07-21
- Kirsch CPA Group
Selecting the Right Payroll System for Your Construction Business
- 04-01-21
- Kirsch CPA Group
Self-Employed May Be Eligible for COVID-Related Tax Breaks for 2020
- 03-17-21
- Kirsch CPA Group
COVID-19 Relief: Overview of the New American Rescue Plan Act for Individuals
- 03-17-21
- Kirsch CPA Group
COVID-19 Relief: Business Overview of the New American Rescue Plan Act
- 03-17-21
- Kirsch CPA Group
Opportunity Zone Investments: A Tax Deferral Opportunity You May Have Overlooked
- 02-17-21
- Kirsch CPA Group
The Status of Temporary COVID Tax Relief Measures After the New Law
- 01-21-21
- Kirsch CPA Group
8 Accounting Practices for a Financially Healthy Construction Business
- 01-07-21
- Kirsch CPA Group
Appropriations Law Adds Some Business Tax Breaks and Extends Others
- 01-07-21
- Kirsch CPA Group
Contending With the Patchwork of State Requirements for Nonprofits
- 12-17-20
- Kirsch CPA Group
Employee or Independent Contractor? The Rules May Be Getting Simpler
- 11-12-20
- Kirsch CPA Group
Do the COVID-19 Extended Deadlines for Health Plans Still Apply?
- 11-12-20
- Kirsch CPA Group
Using Remote Workers? Protect Sensitive Company Data from Exposure
- 10-28-20
- Kirsch CPA Group
What You Need to Know About the Deferral of Payroll Tax Obligations
- 09-15-20
- Kirsch CPA Group
Hobby or Business? How to Treat COVID-19 Sideline Activities for Taxes
- 09-15-20
- Kirsch CPA Group
Monitor These 3 Things as COVID-19 Changes Your Nonprofit’s Priorities
- 08-11-20
- Kirsch CPA Group
FASB Offers Reprieve from Updated Lease and Revenue Recognition Rules
- 07-23-20
- Kirsch CPA Group
COVID-19 Crisis May Affect Tax Angles for Rental Property Losses
- 07-10-20
- Kirsch CPA Group
Last-Minute Strategies for Businesses that Deferred Filing Tax Returns
- 07-01-20
- Kirsch CPA Group
Can Your Business Survive and Even Thrive in These Trying Times?
- 06-18-20
- Kirsch CPA Group
Five COVID-19 Obstacles a Construction Company Needs to Navigate
- 06-12-20
- Kirsch CPA Group
Cash Flow Tip: Postpone Payment of Certain Federal Employer Payroll Taxes
- 04-20-20
- Sue Schloemer
Tax Filing Deadline Remains April 15 – Payment Due Extended to July 15
- 03-19-20
- John Kirsch
8 strategies to help you adapt to economic down turn without layoffs
- 02-24-18
- Diane Glover
