R&D Tax Credits.
ABOUT
Summarizing the R&D Tax Credit.
The Research & Development (R&D) Tax Credit, established under IRC §41, is a federal incentive that provides a dollar-for-dollar reduction in tax liability for qualified research activities. It is available to U.S. businesses of all sizes from small companies to large enterprises as well as U.S. subcontractors performing domestic work. Eligible expenses often include wages, supplies, and contracted research tied to innovation, process improvements, or product development. In addition to the federal credit, many states also offer their own R&D credits, allowing businesses to capture benefits at both levels. Despite this, many business leaders overlook the credit each year, leaving significant money on the table. Because it can be claimed annually, the R&D Tax Credit remains one of the most effective ways to recover costs and reinvest in future growth.
ABOUT
Summarizing the R&D Tax Credit.
The Research & Development (R&D) Tax Credit, established under IRC §41, is a federal incentive that provides a dollar-for-dollar reduction in tax liability for qualified research activities. It is available to U.S. businesses of all sizes from small companies to large enterprises as well as U.S. subcontractors performing domestic work. Eligible expenses often include wages, supplies, and contracted research tied to innovation, process improvements, or product development. In addition to the federal credit, many states also offer their own R&D credits, allowing businesses to capture benefits at both levels. Despite this, many business leaders overlook the credit each year, leaving significant money on the table. Because it can be claimed annually, the R&D Tax Credit remains one of the most effective ways to recover costs and reinvest in future growth.
CONSIDERATIONS
Why It Matters.
Businesses of all types whether structured as LLCs, C-Corps, S-Corps, or partnerships can leverage R&D tax credits to significantly reduce tax liability as a benefit from expenditures tied to wages, supplies, and other qualified research expenses. These credits may be carried back one year to garner refunds of taxes paid, be strategically utilized to offset current-year tax liabilities, and can also be carried forward to benefit future years, providing long-term strategic financial flexibility. Companies across industries regularly secure anywhere from tens of thousands to hundreds of thousands of dollars of tax payment offset through these credits, turning everyday innovation investments into substantial, repeatable financial rewards.
CONSIDERATIONS
Why It Matters.
Businesses of all types whether structured as LLCs, C-Corps, S-Corps, or partnerships can leverage R&D tax credits to significantly reduce tax liability as a benefit from expenditures tied to wages, supplies, and other qualified research expenses. These credits may be carried back one year to garner refunds of taxes paid, be strategically utilized to offset current-year tax liabilities, and can also be carried forward to benefit future years, providing long-term strategic financial flexibility. Companies across industries regularly secure anywhere from tens of thousands to hundreds of thousands of dollars of tax payment offset through these credits, turning everyday innovation investments into substantial, repeatable financial rewards.
THE BENEFITS
Innovation That Pays Off.
Claiming the R&D Tax Credit does more than reduce taxes, it frees capital to fuel growth, innovation, and competitive advantage. These credits strengthen your business today while positioning you for tomorrow’s success.
Reinvest in Progress
Strategically put your tax savings into research, people, and expansion. Use the credit to fund new projects, hire technical talent, or accelerate product development without straining cash flow.
Stronger Financial Standing
R&D credits strengthen your enterprise and improve financial transparency with lenders, investors, and key stakeholders. A well-documented R&D program signals both stability and growth potential.
Enhance Enterprise Value
R&D credits improve cash flow and are an asset on your balance sheet. Businesses with a documented tax credit history demonstrate fiscal discipline and innovation readiness traits that elevate valuation when qualifying for credit, raising capital, pursuing acquisitions, or preparing for an exit.
Recover Missed Opportunities
Eligible companies can amend returns for up to three prior tax years (four in some states) to recover credits for qualified past research activities unlocking substantial refunds from already incurred costs.
Immediate, Tangible Savings
Apply the credit directly against your immediate federal and, in many cases, state—income tax liability. If your company qualifies it may also be utilized to offset the employer's FICA tax payment. The impact is immediate, creating real savings that can be redeployed into strategic priorities.
A Lifeline for Startups
Qualified startups can apply up to $500,000 of R&D credits annually against employer obligation payroll taxes, delivering vital cash flow even in pre-revenue stages. For emerging innovators, this credit can bridge the gap between great ideas and market-ready products.
THE PROCESS
Claim Smarter, Not Harder.
We start with an initial consultation. After learning about your business model and operations, our partner conducts a go/no-go determination using the IRS’s four-part test (permitted purpose, technological in nature, elimination of uncertainty, and process of experimentation). You’ll receive a clear, realistic view of potential benefits, projected cash impact, and whether pursuing the credit is genuinely worthwhile before engaging our designated R&D provider.
Once you’re ready to move forward and advance the process, BDC connects you with an accredited, nationally recognized R&D Tax Credit Consultancy operating in our collaboration network. Cross-collaboration between the provider and BDC helps accelerate the engagement process, ensuring both teams are fully aligned for a seamless kickoff. Together, we define your business objectives, review timelines, and establish how the credit strategy will deliver measurable financial impact for your company.
Your provider performs a comprehensive discovery and assessment, reviewing documentation, conducting follow-up interviews, and analyzing data to identify every Qualified Research Expenditure (QRE). This process explores every maximization opportunity while preserving full IRS defensibility and compliance.
Projects are mapped to Section 41 criteria and linked to eligible employees, supplies, and contract research. The consultancy determines the most advantageous computation method (ASC vs. Regular), evaluates a §280C election, and develops a detailed credit plan with defined milestones and a precise credit estimate.
Each claim undergoes multiple internal reviews and cross-checks before reaching the final legal review by a tax attorney, ensuring maximum accuracy and compliance meaning nothing goes unchecked. Once the attorney’s approval is complete, you’ll receive the final comprehensive R&D supplemental report along with the official filing Form 6765 ready for submission to the IRS.
BDC and the R&D consultancy provider jointly guide you through the filing process, coordinating with your CPA, CFO, or tax preparer to ensure proper submission of all forms. Should any questions arise, both teams are readily available to provide clarification and support.
All BDC clients receive complimentary audit defense through our special arrangement with your R&D consultancy provider. Our joint agreement together with your provider means our clients are spared from costly defense representation should a credit claim be examined or audited. If your R&D claim is ever examined by the IRS, you’ll be represented through the entire process, from the first IRS or state inquiry to a final determination letter at no additional cost. This added layer of protection safeguards our clients shielding them from receiving expensive legal bills. Audit protection also extends to flow-through entity owners, ensuring full-circle coverage and continuity for our clients.
After filing is complete, BDC and your R&D provider remain available for ongoing, year-round support. We’re here to answer questions, review documentation, and help plan future R&D credit filings as your business evolves. Support doesn’t end when your study and files are delivered because we know questions and opportunities arise regularly. For businesses conducting research annually, evergreen engagement options are available to streamline recurring claims and maintain long-term continuity.
R&D
Tax
Credits
Better
Be
BDC.
BDC is proud to include R&D Tax Credit Services among our core offerings. The credit is one of the most valuable incentives available to U.S. businesses, often returning thousands to hundreds of thousands of dollars in capital.
Through our collaborative network, we’ve engaged a leading R&D tax credit provider with a proven track record of success. BDC works with you to assess eligibility and align the credit with your business objectives, then coordinates with our trusted provider to move seamlessly into execution.