Many industries and companies have now started to integrate technology into their day-to-day processes and the medical industry is no exception. Incorporating technology into the medical field has not only made the practice more efficient for both doctors and patients but has also paved the way for medical software companies to gain research and development tax credits to further software advancements.
How Do Companies Benefit From R&D Tax Credits?
The Research and Development Tax Credit was created in 1981 as an incentive for businesses to take risks and undergo research activities to develop or improve their products, processes, or software. Businesses who are actively involved in performing research and development that meet certain criteria will be rewarded for their efforts with dollar-for-dollar tax credits that help offset the price it took to test products, contract research expenses, develop patents, pay employee wages and pay for the cost of supplies it took to develop certain products.
These credits were designed to help companies continue research and development to advance their industry. In order to be considered for R&D tax credits, the research and development you perform must:
- Improve the quality, function, or reliability of a process or product
- Identify information to remove ambiguity in the development or improvement of a production process
- Involves stimulation, logical trial and error, assessing alternatives, and refining hypotheses
- Research relies solely on physical sciences, biological sciences, computer sciences, or engineering
What Types Of Activities Would Qualify Medical Software Companies?
As the medical software industry expands, the opportunity for companies to receive R&D tax credits continues to grow. Some examples of activities software companies perform that would qualify for R&D tax credits include:
- Developing software that allows more efficient and faster access to patient’s medical records, recording services and reports on outcomes of exams
- Developing software that helps doctors and physicians streamline decisions, collaboration, and costs for their patients by applying real-time data to examine best practices
- Developing software that can track how physicians are using their time and taking unused time to help remote and emergency room patients
- Developing software used to help cancer patients receive the correct drugs and radiation scheduling from the start
- Developing software that allows an easy transfer of information from departments or doctors
- Developing software that streamlines physicians clinical workflows from patient appointments to insurance settlements
- Developing software that helps boost growth by applying marketing strategies that help to gain new and loyal patients
My Company May Qualify For R&D Tax Credits, Now What?
If you think your company has been performing research and development and may be eligible for these tax credits, contacting a team of trusted and experienced tax professionals would be the first step.
At National Tax Group, our team of tax experts has more than 20 years of collective experience with helping businesses collect R&D credits. Start maximizing your tax credits today and give our team a call at (561) 257-3436 to set up your free assessment.