R&D tax credit · Companies with technical staff
You’re probably already doing the work. Few ever claim the credit.
About 90% of companies have improved a product or a process. That is the hoop.
Federal income tax credit, every year
$0
What’s in this number
6% to 10% of the wages entered, after the §280C election: $60,000 to $100,000 a year, dollar for dollar off the tax itself.
At $1,000,000 of technical wages: an illustrative federal credit of $60,000 to $100,000 a year.
Illustrative example. Confirm with your CPA.
What is the federal R&D tax credit?
The federal R&D tax credit (IRC §41) is a dollar-for-dollar cut in federal income tax for improving a product, a process or software: 6% to 10% of the wages paid to technical staff, every year, with no lab or patent required. Longtable prepares a documented study to IRS standards, and your CPA confirms what qualifies and files.
Do you qualify?
90%
of companies have improved a product or a process.
Improved how you make something, or how you work? You’ve already qualified.
No lab, no patent, no white coats. It looks like this:
You tried to make something work better.
You leaned on engineering or science to do it.
You did not know at the start whether it would work.
You tried more than one way.
The pool
$2.04T
into R&D in 2024, US and China combined. And rising.
A $2.04 trillion pool. The government wants you in it.
No catch, no loophole: Congress put this money on the table on purpose, to pay American companies for improving things. The Fortune 500 all take full advantage of it, in every industry, with or without a lab. It is on the table for work you already do.
United States
China
How it works
From the number above to a credit on your return.
Run the illustration.
Done, above. Bring it to a 30-minute call. Your CPA is welcome; no documents needed yet.
We prepare a documented study.
Specialists, engineers and tax professionals document every project, person and cost to IRS standards, from your real numbers.
Your CPA confirms and files.
What qualifies, how much and in which year are your CPA’s determinations, on Form 6765 with your return. Going forward, and back where open years allow.
More information
The four-part test. Treasury Regulation §1.41-4 asks for a permitted purpose, a technological basis, uncertainty at the outset and a process of experimentation. The four plain questions above are those four. Your CPA confirms each activity against them.
Deduction vs. credit. On $100 of spending, a deduction saves $21 at the 21% corporate rate or $37 in the 37% top bracket. A credit of $100 saves $100. Tax code §11, §1 and §41.
What counts. Wages of the people who perform, supervise or support the research; supplies used up in it; contract research at 65%. Cloud and hosting used for qualified development are increasingly included. Your CPA confirms the base.
Not profitable yet. A qualified small business, under $5,000,000 in gross receipts and with no receipts more than five years ago, can apply up to $500,000 a year of the credit against employer payroll tax, with no income tax owed (§41(h)). Elected on Form 6765, Section D, and applied on Form 8974 with the quarterly Form 941.
Two methods. The regular credit is 20% of qualified expenses above a base amount; the Alternative Simplified Credit is 14% above half of the prior three-year average, and is the one most companies use. After the §280C reduced-credit election the in-pocket figure typically lands at 6% to 10% of qualified expenses, which is what the illustration shows.
State credits. Roughly three dozen states add their own research credit on top of the federal one. Your CPA confirms the state layer; it is not in the illustration.
Looking back. Companies that never claimed the credit can generally amend open returns, typically up to three prior years. That is separate from the §174A small-business election, which closed on July 6, 2026. Immediate expensing of domestic research costs is otherwise back and permanent for tax years beginning after December 31, 2024.
The risks, plainly. Not every activity qualifies. Documentation matters. Eligibility, amounts and years are your CPA’s determinations. Tax law can change. We put it in writing, and so does your CPA.
Is it a fit?
Built for.
- Engineers, developers, scientists or technicians on your payroll.
- A federal income tax bill, or a startup under $5,000,000 in receipts paying US engineers.
- A CPA willing to review a documented study.
- Routine production, market research or style changes.
- No US technical payroll.
Straight answers
Questions, answered.
- Is this a shelter? Will it get me audited?
- No. The credit has been in the tax code since 1981 and permanent since 2015. What draws scrutiny is a claim without documentation; the study documents every project, person and cost before your CPA files anything.
- Does our work count if we don’t have a lab?
- Yes. It is about the activity, not the setting: a shop floor, a dev team, a test kitchen. You do not have to succeed, and you do not need a patent.
- Is this a deduction?
- No. A deduction trims the income you are taxed on. A credit comes straight off the tax itself, dollar for dollar. Your research wages stay deductible as well.
- What does it cost?
- Running the illustration and having the call cost nothing. If you go ahead, every term is in writing before anything is signed.
Schedule a Meeting
Before your next tax filing.
Thirty minutes. Your CPA welcome.
Or call 248.742.0065Mon – Fri: 9:00 AM – 5:00 PM