The Credit for Increasing Research Activities, also known as the Research & Experimentation (R&E) tax credit, is one of the most prominent federal tax credits available to businesses.The purpose of the Credit for Increasing Research Activities is to invest in research that leads to new ideas, discoveries, and knowledge that will help to support a growing economy. In particular, the purpose of the R&E tax credit is to increase investment in research and experimentation activities. In my opinion, it is one of the most valuable federal tax credits that can be obtained. It has been claimed by a significant number of companies, ranging from small software startups, to multinational pharmaceutical firms, and many in between.
The R&E credit was initially introduced in 1981, and temporarily extended 16 times before becoming permanent under the Protecting Americans from Tax Hikes (“PATH”) act of 2015