Contrary to popular opinion, the tax credit is not just for scientific research done in a laboratory setting. The credit is also available to companies introducing new products, improving current products, and developing or enhancing their processes.

In other words, your company might be able to take advantage of this beneficial tax break simply by making its products better, faster or more cost effective.

If your firm is eligible, you can generally claim a 20 percent credit for related expenses above a base amount, including:

 In-house expenses for wages.
 Supplies used to conduct the research.
 A percentage of any contract costs.

Good news: In recent years, the IRS has relaxed some of the requirements for the Research and Development Credit. Even if you didn't qualify in the past, you might be eligible now. In addition, many states grant their own special tax benefits to companies engaged in research and development.

The process to collect research tax benefits is complex. Companies must provide certain documentation showing that their projects are not just part of the ongoing cost of doing business.

Under the Emergency Economic Stabilization Act of 2008, this credit is set to expire on December 31, 2009, but has been renewed numerous times.

Take full advantage of your firm's innovations! We can help determine if you qualify for the tax credit and take care of the paperwork. You might even be eligible for a refund if you engaged in qualified research in the past but never claimed a credit. Contact Tax Supervisor Kevin Eisenhart, CPA if your company has invested time and resources to develop new products or processes - or improve current ones.  You can reach him at 717-757-6999/800-745-8233, or send him an email by using the contact box below.