Companies in the biotech industry are continuously performing research and developing products to advance the production and processes of pharmaceuticals, biotechnology, medical devices, and other life sciences, making them the ideal candidates for R&D tax credits.
In fact, because most biotech companies are moving away from focusing their efforts on one or two drugs at a time and are now developing a series of potential products and drugs simultaneously, they have the opportunity to receive even more credits for their efforts.
What Are Research & Development Tax Credits?
The research and development tax credit was created by the government to incentivize businesses to perform research and development within the U.S.
Companies who take the risk of performing these activities are rewarded with dollar-for-dollar tax credits that help offset the costs it took to do them. In order to receive the credits, companies must pass a 4-part test that basically states that the activities you perform must:
- Improve the quality, function, or reliability of a process or product
- Remove ambiguity in the development or improvement of a production process
- Must involve a systematic process
- Must be technological in nature and rely on science or engineering
What Types of Activities Would Apply For Biotech Companies?
The biotech field covers a wide variety of industries and activities that have a high potential of gaining research and development tax credits. Some examples of these activities include:
- Developing new or improved pharmaceuticals, biologics or medical devices
- Developing improvements to increase the shelf life of a product
- The reformulation of an existing drug to reduce side effects or dosage
- Designing and developing certain hardware and software systems for use in research and clinical development
- Improving the manufacturing process of a drug
- Researching and developing new uses for existing drugs
- Establishing a new factory or production line where new technology is employed or new manufacturing techniques are used
- Developing technology for compliance with EPA and FDA requirements
Our Team Of Tax Experts Can Help You Claim Your Credits
If you think your company applies for R&D tax credits, hiring a team of experienced tax professionals to help with this process will help guarantee that you receive all the money your business is entitled to.
At National Tax Group, we’ve helped companies in multiple industries claim the full amount of credits they are owed. Give us a call at 561-257-3436 to set up a free assessment with our team today.