Guest View: Loving the R&D tax credit
By Tracey Baird, Angelique Garcia and Robert Wonish
February 1, 2010 —
(Page 1 of 4)
Where is the bailout for the American software industry? When virtually every financial institution and automobile maker has their hand out waiting to see what the American government can do for them today, it may be helpful to take a closer look at what the government has already done.
The growth and success of a software company rests on its ability to be innovative and stay ahead of the curve. In 1981, in the wake of a recession, the U.S. Congress enacted a Federal tax credit designed to spur domestic investment in research and development. Why is that important to software developers? Because in the tax code, the development of software is defined as a qualified research activity.
Fortunately, since 1981, lawmakers have continued to update, expand, refine and renew the research and development tax credit, which is now one of the most lucrative tax credits available to the software industry. While this credit has been around for a long time, recent changes to the regulations that interpret the credit have helped to make it available to thousands of additional taxpayers. So do you qualify for the R&D credit? Are you taking the credit? If you haven’t taken it before, how do you get started?
If you are developing new or improved software features or functionality and go through a development process (agile, waterfall, prototyping, spiral, RAD, whatever), your activities most likely qualify.
For example, one of our clients designs and develops applications for the healthcare industry using the waterfall development methodology. It employs teams of programmers who develop their products and perform quality assurance tests. It also employs analysts, project managers and executives who assist in the concept development and testing of these applications, as well as supporting and supervising the teams. This client utilized the waterfall development methodology that began with a requirements definition, then moved on to specification, system and software design, implementation and unit testing, integration and systems testing, acceptance testing, and operations and maintenance.
The R&D credit requires that recipients satisfy four requirements or tests to qualify. First, you must develop a new or improved business component (e.g. software); second, your work must be technological in nature; third, there must be uncertainty; finally, you must engage in a process of experimentation. Let’s look at each of these requirements.
Related Search Term(s): finance
Share this link: http://sdt.bz/34099
Most Read Latest News Blog Resources
Zeichick’s Take: Radio moves from analog waveforms to digital packets
Streaming radio highlights the need for streaming applications to be designed to take up as little bandwidth as possible
|
|
Taking enterprise architecture to the business side
Startup Corso is bringing out a cloud-based planning platform that ties into business plans
|
|
Appcelerator Acquires Cocoafish to Add Instant Mobile Cloud Capabilities to its Industry Leading Titanium Platform
Appcelerator Offers Messaging, Social, Location and Storage Mobile Cloud Services to All Mobile App Publishers
|
|
ComponentOne Releases a Collection of 40+ UI Widgets Powered by HTML5 and jQuery
ComponentOne has announced the 2012 release of Wijmo: a kit of UI widgets for HTML5 and jQuery development
|
Taking enterprise architecture to the business side
Startup Corso is bringing out a cloud-based planning platform that ties into business plans
|
|
Top five apps to manage your workload
Web applications offer new ways to track your “to-do” lists
|
|
Not so fast when it comes to testing in the cloud
Developers face outsourcing, virtual lab management and mobile devices as obstacles
|
|
Xceed releases UX-focused suite for Microsoft’s WPF
"Blendables" helps match user experiences to developer visions
|
Are you at risk for burnout?
Burnout is a severe problem and it can strike at any time. Here's how to tell if you are nearing the edge.
|
|
Agility, mom, and apple pie
If we're to evaluate the state-of-the-art in software development, we should start with the values espoused in the Agile Manifesto.
|
|
RIM woos developers with free tablet
How do you get more apps ported to the BlackBerry PlayBook? By giving every developer a free tablet, of course!
|
|
GitHire: Use Headhunters to Find Your Perfect Programmer
Are you a hiring manager tired of scouring the job boards? Check out this new service that will find 5 people interested in your jobs.
|
The Hidden Costs of Software Licensing
Moving beyond paper-based software licensing to more flexible, software-based licensing is a business decision. There is a growing trend tow...
|
|
Case Study: You May Need a Development Mechanic
As a contractor for a major financial player in Germany, SOBEGE, a German-based consultancy specializing in embedded IT and web services, wa...
|
|
Ensuring Software Quality at a Major International Bank
One of the world’s leading international banks has adopted AgitarOne technology for delivering generated unit tests for their Java software...
|
|
Load Testing Adobe Flex Applications
Adobe Flex applications may be different from applications you’ve worked with before. For classic HTML web applications, the server does all...
|