How the R&D credit applies to Cape Coral businesses

The federal R&D tax credit rewards work that tries to improve a product or process through design and testing. In Cape Coral that can be builders working out a better method, marine companies developing new designs and small manufacturers improving what they make.

The credit is claimed on the federal return, so Lee County companies follow the same rules as any other. Many Cape Coral companies are owner-run S corporations or LLCs, so the credit passes through to the owners and your CPA files it with the return.

Work we often see around Cape Coral

• Construction and contractors: engineered building methods and custom systems

• Marine and boat building: marine design, materials and custom builds

• Manufacturers: building products and small-scale manufacturing

• Engineering and architecture: custom designs and technical fixes

Work that often qualifies

• Developing a custom system for a building or waterfront problem

• Trying a new design or material for a marine product

• Building a prototype of a new product and testing it

• Redesigning a process to cut waste or rework

• Documenting trials that failed before a fix worked

Work that usually does not

• Routine construction, installation and repairs

• Production runs to an existing design

• Marketing and cosmetic changes

Costs that count

Wages for the people doing the work, supplies used in testing and a share of outside contractor costs can count when they tie to a qualifying project. We match each cost to a project so your CPA has a file that holds up if the IRS asks.

What to bring to a screening

• A list of custom jobs, products and methods from recent years

• Who worked on them and about how much time they spent

• Photos, sketches, notes or test results

• Payroll and material totals for those projects

Based in Sarasota, we work with Cape Coral and the rest of Lee County, and with businesses across Florida and the United States.