Exploring Research and Development Tax Credits: Software |
Software development companies are ramping up research and development (R&D), as software services and service-oriented architecture take hold in the marketplace. The slowdown in consolidation of enterprise resource planning (ERP) vendors also is driving more R&D activity. You can address the cost and risk of research and development (R&D) by leveraging available federal, state, and local tax incentives.
Software development projects that are likely to have qualified research activities include:
- Developing digital applications that may include software such as mobile communications software for delivering multimedia entertainment, video or Internet games that are increasingly interactive and use more realistic graphics, or multimedia communications software in support of digital, high-definition or interactive entertainment
- Improving security solutions such as electronic surveillance with software that can cull through massive amounts of raw video, voice and Internet data, and then analyze and interpret that information
Whichever credit you explore, you must be prepared to defend reported R&D tax credits. The Deloitte Tax R&D team is a national practice of highly experienced tax professionals specializing in R&D tax incentives and includes former senior officials with the Internal Revenue Service and Treasury who participated in drafting the legislation and regulations. These specialists can help you identify qualified R&D activities and assemble documentation to defend your claim, based on their extensive knowledge of the law and your industry.
The Deloitte Tax R&D approach includes a customizable tool that helps to automate the computation and information gathering, and a Quality Assurance team that reviews deliverables and computations.
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Research and Development Tax Incentives for the Software Industry
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