R&D Tax Credits Overview
Even though the credit is 40 years old, one of the greatest misconceptions is who does and who does not qualify for the R&D Tax Credit. Credits are not limited to companies that solely provide product development — they are equally applicable to companies that develop new processes including improved efficiencies, as well as companies that invest in developing a new product or process for their customers.
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<R&D Tax Credit Services
McGuire Sponsel’s research and development tax credit practice conducts retroactive studies, current year engagements, and risk advisory services. Our professionals combine an understanding of tax law with engineering disciplines to maximize companies’ research credits and reduce their overall tax burdens. McGuire Sponsel provides documentation to withstand the highest level of IRS and state tax authority scrutiny.
We understand Section 174 and the Options Available to Taxpayers
McGuire Sponsel understands the confusion surrounding Section 174 and the options available to taxpayers after the “Big Beautiful Bill” was signed into law. Please see a variety of resources here that help explain the technical differences and how CPAs should be approaching this important topic with clients.
How McGuire Sponsel Can Help
McGuire Sponsel’s proven, trusted approach involves working with CPAs and their clients to build a credit claim that can withstand the highest levels of IRS or state scrutiny. Educating companies on the qualifying criteria and benchmarking against industry knowledge sets an expectation level for all parties early on in the process. Couple these with the fact that McGuire Sponsel works beside CPAs during the engagement ensures that the client is able to utilize the credits generated by an R&D Tax Credit Study. Our team of CPAs, Enrolled Agents, engineers, and consultants take the necessary time to work with clients to explain how the credit intersects with their business in order to optimize the credit claim while reducing exposure if audited.
IRS Experience
McGuire Sponsel’s team of R&D Tax Credit experts has decades of experience defending R&D Tax Credit claims in front of the IRS and state taxing authorities. The team consists of experienced engineers, CPAs, Enrolled Agents, and R&D Tax Credit specialists who provide a reliable and strategic approach to defending credits in the event of an examination.
Our expertise with the tax code, regulations, case law, and experience with examinations over the years enables McGuire Sponsel to deliver highly effective examination defense services with an excellent defense success rate. We represent our own clients under examination, and also represent clients who have pursued the R&D Credit with the assistance of other service providers.
Every examination is different. And every examining agent has a different approach. McGuire Sponsel’s professionals diligently manage the examination process to ensure minimal disruption and an optimal outcome for our clients.
Do You Qualify for the R&D Tax Credit?
Technical Uncertainty
A company’s ability to claim the R&D Tax Credit is based on the risk of uncertainty. The R&D Tax Credit rewards companies based on their attempt to resolve technical uncertainty related to a new or improved product, process, technique, formula, invention, or computer software.
Economic Risk
A company must bear the economic risk of their product or process development in order to claim the R&D Tax Credit. In other words, a company must get paid based on the success of their research. In most cases, companies are paid on a fixed-price basis, which signifies they bear the economic risk.
What makes a great R&D opportunity?
– Do you employ degreed chemists, engineers, programmers or scientists?
– Do you develop and/or improve new products or processes?
– Do you build prototypes to test?
– Do you incur raw material costs during the product development/improvement process?
– Do you subcontract any engineering or testing functions?
Let's TalkRecent Resources
- Case Study
- Webinar
- White Paper
Design/Build Manufacturer receives $260,000 in Federal Tax Credits
When a company specializing in designing and fabricating turnkey automation systems for Toyota, Nissan and Honda reached out, McGuire Sponsel’s consultative approach helped maximize the client’s R&D Credit. Through fieldwork interviews and extensive analysis of time-tracking data and project documentation, McGuire Sponsel was able to identify $4.1 million of qualified research expenses for the company, resulting in an effective federal tax credit of $260,000.
Criteria of the R&D Tax Credit
This webinar discusses the criteria of the R&D credit, what constitutes qualified research activities, eligible research expenses, and recent R&D tax credit updates. Additionally, the webinar examines recent audit trends and the contemporaneous documentation needed to substantiate R&D credit claims.
T.D. 9786
On Oct. 4, 2016, the IRS published T.D. 9786, final regulations that improve opportunities for businesses that engage in internal use software development to claim the R&D Tax Credit. The final regulations provide guidance in defining qualified research activities related to internal use, non-internal use and dual use software development, effective for tax years beginning on or after Oct. 4, 2016.
Recent Blogs
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blogAlliance NetworkJuly 9, 2025‘Big Beautiful Bill’ Tax Legislation Brings Immediate Planning Opportunities for CPA Firms
by Jerry Hammel, CPAJust days after the latest tax legislation—informally dubbed the “Big Beautiful Bill”—was signed into law, significant planning opportunities are already...
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podcastsR&D Tax Credit ServicesJune 26, 2025
The Hidden Burden: Breaking Down Section G of Form 6765
by Jerry Hammel, CPA, & David Seibel, EAHost Jerry Hammel, CPA, sits down with David Seibel, EA, to unpack the new reporting requirements for Form 6765, with...
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blogR&D Tax Credit ServicesJune 15, 2025
Texas Extends and Expands R&D Tax Credit
by David Seibel, EAOn June 1, Texas Governor Greg Abbott signed Senate Bill 2206, which extends the Texas R&D Credit that was set...
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podcastsR&D Tax Credit ServicesJune 5, 2025
R&D Tax Credits & the One Big Beautiful Bill: Understanding Amortization and Proactive Planning
by Jerry Hammel, CPA, & David Seibel, EAGuest host Jerry Hammel, CPA, sits down with David Seibel, EA, to discuss the “One Big Beautiful Bill”—a sweeping piece...
