There are quite a number of factors that prove eligibility of a project to get tax credits. The refund you will get will depend on the amount you spent in R&D and the size of your business. For example, SMEs can get back up to 33% while large companies may get up to 10% refund of their R&D. This refund is still valid whether the project fails or not. Tax credits can be gotten if the following tips are considered.
First, your idea has to be highly scalable and enhanced performance. This means that, there has to be technical uncertainties in your project. In other words, if you already know the outcome of whatever you are intending to do, then it doesn’t qualify for research and development. You can only research and develop something that its outcome cannot be predetermined. Also, innovation is a very important factor that will qualify your R&D project or disqualify it. R&D projects are unique in a way because the knowledge of how they were done is usually different from what is commonly known. Your project must achieve results that are unique to itself for it to qualify for tax credits and refunds.
The amount spent in the research and development of the project is also important in determining if you qualify for tax credits or not. For example, spending $3k or less will mean that you did an obvious project whose results can be know, and there were no technical uncertainties encountered. However, if you spend $100000 in a different project, then it means there were some technical uncertainties that needed to be determined, hence it will definitely qualify. Most projects will require a lot of funds in their research and development, which makes cost a critical factor.
The qualifications of your staff and their number are equally important factors in determining whether you qualify for the tax credits. If you have many qualified people helping you in the project, then there are high chances that it is R&D. Also, the amount of time these personnel spend in the project has to be more for it to be R&D. However, lack of this won’t necessarily lower your chances of getting credit taxes whatsoever. The number of people involved in the research and development process is key in the determination of the cost of the project. When you employ more experts to help you in the project will require you to spend more on staff salaries, purchase of equipment and software, and other miscellaneous tasks. This means that you will be entitled to a refund of a certain percentage of whatever amount of cash you put into project research and development.