The Research and Development Tax Credit – An Often Overlooked Perk for SMBs
Hidden treasures are more common in fairy tales than the business world, but there is one potential “pot of gold” that is often overlooked by small and medium size businesses (SMB’s). The gem in question is the federal research and development (R&D) tax credit.
If your company has spent time and other resources developing new or improved products and/or business processes, you may qualify for the credit. And the truth is only a fraction of U.S. companies that qualify for it actually claims the credit.
Any taxpayer engaged in qualified research activities, as determined by the U.S. government, can receive the credit with companies in the following industries most likely to qualify:
- Software Development
- Tool and Die
- Biotech and Pharmaceutical
- Architecture and Engineering
- Oil and Gas Exploration
- Brewery and Distillery
Here’s how it works. The federal R&D credit is a dollar-for-dollar credit against federal tax. It can be taken during the year earned or, in some cases, carried forward to future tax years or back to prior tax years. Companies also can claim credits from prior years and request a refund.
R&D tax credits are available to any company that increases its qualified research spending. Brand new companies, existing companies embarking on R&D for the first time or established companies expanding their R&D budget are all eligible. In addition to the federal R&D credit, many states also offer credits for research activity.
Rugged Technology for R&D in the Field
For industries requiring data collection and research in the field, there are a number of available technology platforms, ranging from mobile computers, tablet PCs and smartphones. When choosing a solution, the expected work conditions play a major role. Today’s rugged mobile computers are engineered to perform in the harshest environments. Dust, grime, spills and falls are no problem for these devices, and they are equipped with built-in wireless technology that allows them to perform research in just about any location.
Stone Energy, an exploration and production company with drilling operations in the Gulf of Mexico, turned to Panasonic Toughbook® mobile computers because their existing equipment couldn’t withstand the salt, chemicals, wear and tear and frequent wash downs common on drill floors.
Toughbook laptops also helped Stone Energy be more productive. Due to the computers’ large touch screens, workers can enter in data without worrying about taking their gloves off or cleaning their hands.
Improving Productivity and Collaboration Across Teams and Locations
One of the biggest R&D challenges is merging the collective data and knowledge of teams or individuals that often work in silos or in different locations. Beyond project management software platforms, other technologies are available to improve the R&D process.
Interactive whiteboards, such as Panasonic’s Panaboards, can improve team collaboration by changing ordinary meetings and presentations into visually active exchanges. PC images can be projected directly onto the whiteboard’s surface, while allowing the presenter to manipulate the data on the board with a finger or electronic pen. Images can easily be moved, scaled and rotated. For easy information sharing, users can also print out everything that was written on the board from a printer connected to the PC or Panaboard.
For facilitating R&D sessions between remote locations, videoconferencing technology is a valuable tool. With full HD 1080i video and 360° audio delivered over a standard broadband connection, today’s advanced videoconferencing systems can improve productivity while also reducing travel expenses.
Hamaspik, Inc., a non-profit health and human services organization based in New York, turned to Panasonic to help improve collaboration between its four facilities. The organization’s use of Panasonic’s HD Visual Communications System has saved precious time and money, and has also enabled a level of team collaboration long hoped for but unable to realize until now.
“Communication is so much easier now and issues are handled quickly. Basically, we’re saving a whole day of work each time a meeting is called together,” said Zalmen Stein, Director of Development at Hamaspik.
Investments in R&D are critical for many SMBs in order to stay competitive in the market. Now, with new technologies that help improve productivity and collaboration, and a tax break from Uncle Sam, the return on these investments is clearer than ever.
To determine whether your business qualifies for the Research Tax Credit, go to http://www.irs.gov/businesses/article/0,,id=101382,00.html.