The
Research and Development (R&D) Tax Credit, sometimes referred to as the Research Tax Credit, may be available to businesses that engage in certain qualified research activities. This can include efforts to develop or improve products, processes, software or technology. The credit is not limited to specific industries, and businesses in areas such as manufacturing, engineering and distribution may also be eligible, depending on their activities.
The credit is generally calculated as a percentage of qualified research expenses, which may include wages, supplies and certain third‑party costs, above a defined base amount. In some cases, eligible small businesses may be able to apply a portion of the credit against payroll taxes, which can help reduce overall tax liability even if little or no income tax is owed.
To claim the Research Tax Credit, businesses must file
Form 6765 with their federal tax return and maintain appropriate documentation to support eligibility. Because qualification requirements and calculation rules can be complex, businesses may benefit from consulting a qualified tax professional to determine whether the credit applies to their situation.
The Inflation Reduction Act made
a non‑refundable tax credit of up to $7,500 available to individuals and businesses that purchase a new, qualified plug‑in electric or fuel‑cell vehicle, provided certain vehicle and income requirements are met.
In many cases, buyers can now transfer the credit to a registered dealer at the time of purchase, effectively reducing the vehicle’s purchase price instead of waiting to claim the credit when filing a tax return. Not all vehicles or buyers qualify, and eligibility depends on factors such as vehicle sourcing, dealer registration and income limits.
The Secure 2.0 Act created more incentives for employers to offer their workers retirement benefits. These include several tax credits designed to help offset the cost of starting and maintaining a retirement plan.
Some eligible employers with fewer than 100 employees may be able to claim the
Retirement Plans Startup Costs Tax Credit, which can cover certain ordinary and necessary costs associated with setting up and administering a SEP, SIMPLE IRA or qualified retirement plan, such as a 401(k). The costs generally include everything related to setting up, administrating and educating your employees about the plan.
In certain situations, employers may also qualify for an additional tax credit for adding an
auto-enrollment component to a retirement plan. In some cases, eligible employers may also be able to claim a tax credit for
employer contributions made to employees’ retirement plans during the plan’s first several years.
These non-refundable credits are generally claimed using
Form 8881. Employers should consult a qualified tax professional to determine eligibility and ensure proper filing.
If you hire someone who has been unemployed for an extended period, you may have been eligible for the
Work Opportunity Tax Credit (WOTC), which historically allowed businesses to claim up to $2,400 per eligible hire, or as much as $9,600 in certain cases, depending on the employee’s qualifying category. Eligible groups included veterans, individuals receiving public assistance, and previously incarcerated people.
However, the Work Opportunity Tax Credit expired on December 31, 2025 and is not currently available for employees who begin work in 2026, unless Congress renews the program. In the past, lawmakers have sometimes extended WOTC retroactively, so some employers continue screening new hires in case the credit is reinstated.
When the credit is active, employers must complete Form 8850 and receive certification from their state workforce agency before claiming it. The credit is non‑refundable and generally applies against income taxes owed. Businesses should consult a tax professional for guidance on current eligibility and legislative updates.
