The Research and Development Tax Credit (R&D Tax Credit) under Sec. 41 of the Internal Revenue Code is a federal tax incentive available to small, mid-market, and large companies that perform qualified research and development activities in the United States. The credit can be worth as much as 20% of a taxpayer’s qualified research expenses that exceed an established base. The R&D Tax Credit may be carried forward for up to 20 years. Additionally, qualified small businesses may utilize up to $500,000 of the R&D Tax Credit as a payroll tax offset.

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