Infographic: Everything You Need to Know About US Research & Experimentation (R&D) Tax Credits

The US Research & Experimentation Tax Credit or R&D Tax Credit is a general business tax credit under Internal Revenue Code section 41 for companies that incur research and development (R&D) costs in the United States. The US R&D tax credit has been around since 1981.

However, it has never been permanent – it would periodically expire and be renewed by Congress. Companies wishing to include this in their long-term budgeting plans couldn’t count on the credit being around for certain. Additionally, many companies couldn’t benefit from the credit since they didn’t owe federal income tax or were subject to the alternative minimum tax (AMT).

In 2015, the Congress made the R&D tax credit permanent and also made key changes so that more companies can benefit from the credit.

We know that this program can seem complicated for first-time claimers so we attempted to simplify it into an easy-to-read infographic.

(Click infographic to open in a new tab)

California R&D Tax Credits

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