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R&D Credit Expenses

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Posts: 6
Joined: Fri Aug 24, 2018 5:49 pm
Location: Maple Grove, MN

R&D Credit Expenses

Post by » Wed Jul 22, 2020 12:40 pm

We are a user of IQ and are beginning to look into the possibility of claiming the R&D tax credit. Regarding capturing and tracking purchased supplies and equipment, is there any functionality within IQ that you are using to help identify those expenses?

In general, if you are a custom molder, are you seeing benefit in the R&D tax credit? More specifically, are you claiming expenses other than wages?
Posts: 3
Joined: Wed Aug 22, 2018 1:40 pm

Re: R&D Credit Expenses

Post by » Mon Aug 03, 2020 4:51 pm

Hi Dan,

There are three types of expenditures that can qualify for the credit:

Wages paid for qualified services
- Qualified services includes engaging, directly supporting, or directly supervising qualified research activities (4-part test)
- Engineers, process techs, technical sales engineers, tool room, quality personnel, etc.

Supplies used in the conduct of research
- Resin used to sample new molds
- Payments made to 3rd party toolmakers (if correct fact pattern)
- Costs (labor and materials) to construct to injection mold for sampling testing
- Contract Research

Payments to 3rd parties for research on your behalf
- Must be at risk, must own rights to research
- Testing, outsourced sampling, 1099 engineers[/list]

I have had some clients implement cost capturing systems, with varying success, using IQMS. Happy to chat with you on what worked, and what didn't work.

Michael J. Devereux II, CPA, CMP
Mueller Prost LC

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