R&D Tax Credit for Agriculture

R&D Tax Credits for Agriculture

What is the R&D Tax Credit for Agriculture?

The R&D tax credit for Agriculture is a unique tax incentive that benefits Agricultural businesses that develop new or improved food transportation processes, test and implement techniques to prevent crop diseases and pests, develop techniques or equipment to maintain compliance with environmental regulations, improve farm facilities, or design farm waste management systems. The R&D tax credit reduces your federal tax liability dollar-for-dollar and allows businesses an immediate source of liquid assets to get projects off to an immediate start. Businesses are also able to claim the R&D tax credits retroactively for up to 3 or 4 years for work that has already been completed.

Many Agriculture businesses may be eligible for the R&D tax credits and not even realize it. Does your Agriculture business qualify for the R&D tax credit? The IRS has 4 guidelines in place to help businesses understand if they may qualify:

1. Does your business develop or improve upon products, businesses, or services?

2. Does your business systematically evaluate one or more alternatives during the process of experimentation?

3. Does your business attempt to solve a technical uncertainty?

4. Does your business fundamentally rely upon established principles of science?

If you answered yes to these 4 questions, your Agriculture business may be eligible to claim these beneficial R&D tax credits. Proveres is here to help you figure out the details.

What can the R&D Tax Credits do for Agriculture businesses?

Reduce your payroll taxes
Use as non-dilutive funding
Carry your credit forward

How It Works

Proveres will work closely with your business to gain maximum tax credits each year by following these 5 steps:

Identify & Discover

Proveres provides a full analysis of your business and operations, and will help identify which projects and work your business does that can be claimed towards the R&D tax credit.

Quantify

Proveres reviews expense-related data from your business and identifies what will qualify for the R&D tax credit.

Qualify

Proveres gathers relevant information and documentation into the qualifications for each R&D tax credit claim.

Validate & Support

When the credits to be claimed have been calculated and validated, Proveres assists your business to facilitate a smooth tax filing process.

Annual Reviews to Maximize Credits

In addition to discovering existing R&D tax credits your Agricultural business qualifies for, Proveres also helps your business identify and implement procedural changes to unlock future R&D tax credits.

Some Agricultural sub-industries that may qualify for R&D Tax Credits (but not limited to):

Farmers of all types – Egg, Dairy, Fruit, Berry, Grain, Hay, Hops
Tree Fruit, Nuts, Citrus
Row Crops
Nurseries
Cold Storage Warehouses
Farm Equipment Retailers
Feed & Fertilizer Retailers
Trucking & Refrigeration

Some examples include, but are not limited to Research, Development, Design, Experimentation, or Testing of any of the following industries:

Farm Supply – Agrichemical, Nutrients & Seeds, Animal Feed
Farming – Livestock and Animal Husbandry, Fisheries, Row and Tree Crops, Dairies/Cheese/Milk, Cooperatives
Food Processing – Processors and Manufacturers, Organic and Natural Foods, Beverages, Packaging and Bottling, Nutraceuticals
Distribution – Food and Beverage, Cold Storage, Warehousing, Wholesaling, Exports
Consumption – Retail, Restaurants, Food Service, Direct-to-Consumer
Post-Consumption – Disposal & Recycling

Additionally, if you have employees or 3rd-party contractors with the following job titles, you may qualify for R&D tax credits:

Agricultural Engineers
Agronomists
Consultants
Crop or Farm Managers
Hydrologists
Mechanics
Plant or Soil Scientists

To learn more about the R&D Tax Credit for Agriculture, and whether your business qualifies, please contact us