Companies in the telecommunications industry make strong candidates to claim the Research and Development (R&D) Tax Credit. Businesses within this industry create prototypes and conduct process developments on a daily basis. The tax incentive eligibility broadens when companies acknowledge that not only do their development efforts qualify, but also their activities and operations can be claimed as part of the R&D Tax Credit. Employees spend a considerable amount of their time developing, designing and improving products. These activities fulfill the IRS Four-Part Test and are considered qualifying research activities (QRAs) for purposes of the tax incentive. Therefore, they can be claimed under the Research and Development Tax Credit.
Another indication which shows that they are strong contenders for the R&D Tax Credit is that they hire employees that have technical backgrounds like industrial, mechanical, electrical and process engineering. These academic achievements allow them to conduct highly technical activities, meeting one of the four requirements to fulfill the IRS Four-Part Test. The QRAs below are examples of eligible activities for the R&D Tax Credit:
- Development of integration system for mobiles, media and networks.
- Improving product safety, quality and durability.
- Implementation of safety standards and quality assurance processes.
- Testing materials to increase product performances.
- Innovate existing products.
- Develop processes and software to improve data management.
Does your company perform any of these telecommunication activities? Visit the Indago website www.indagotax.com or email us at [email protected] to learn more about the Research and Development Tax Credit.