How can CPAs identify clients who may qualify for R&D credits?

CPAs can look for clients developing or improving products, processes, software, formulas, tooling, materials, or technical methods. Qualification depends on technical uncertainty, experimentation, expenses, and documentation.

Do clients need a formal R&D department to qualify?

No. Clients do not need a formal R&D department to be reviewed. Many companies perform qualified research through engineering, production, software development, quality improvement, or technical problem-solving teams.

What records should CPAs ask clients for?

Helpful records may include project notes, engineering records, test results, prototype documentation, software development notes, time records, payroll details, supply costs, and documentation showing technical uncertainty and experimentation.

Should CPAs perform the technical R&D analysis themselves?

CPAs may identify potential opportunities and support financial documentation, but technical R&D analysis often requires deeper review of engineering, software, production, testing, or process improvement activity.

R&D Tax Credit for CPA Clients: Qualification Guide

CPAs are often the first advisors to notice when a client may be performing technical work that should be reviewed for the R&D Tax Credit. Understanding R&D tax credit for CPA clients opportunities can help CPAs recognize activities that may qualify, ask better intake questions, and guide clients toward a more technical review when appropriate.

Since 2004, RCG has completed more than 25,000 R&D tax credit studies and identified over $750 million in tax savings. RCG’s team includes CPAs, tax specialists, engineers, technical writers, and architects who support federal and state R&D Tax Credit studies with audit-ready documentation.

RCG provides R&D Tax Credit support for CPA-referred businesses across Ohio, including manufacturers, software companies, engineering firms, food processors, plastics companies, metal fabricators, tool and die shops, and technical service firms in Columbus, Cleveland, Cincinnati, Akron, Dayton, Toledo, Canton, and surrounding business communities.

Many businesses do not describe their work as research and development. A manufacturer may call it process improvement. A software company may call it feature development. A food processor may call it formulation work. A fabricator may call it solving a production problem.

For CPAs, the opportunity is to recognize patterns that may warrant review. The R&D Tax Credit is not limited to laboratories or patent-level inventions. Clients may need review when they develop or improve products, processes, software, formulas, techniques, or technical methods through documented experimentation.

Eligibility is not automatic. A client’s activity must be reviewed based on technical uncertainty, experimentation, qualified expenses, and available documentation.

Cost Segregation may apply to many property types, including warehouses, manufacturing facilities, medical offices, dental offices, office buildings, industrial properties, retail spaces, and mixed-use commercial properties.

Client Activity	Why It May Need Review
Product development	May involve technical uncertainty, testing, prototyping, or design changes.
Process improvement	May involve improving efficiency, quality, throughput, or repeatability.
Software development	May involve architecture, functionality, integrations, automation, or scalability.
Formula or recipe development	May involve ingredient testing, stability, performance, or production scaling.
Tooling or fixture changes	May involve tolerance control, repeatability, manufacturability, or defect reduction.

A short client conversation can help determine whether further review may be worthwhile. CPAs may ask whether the client developed or improved a product, process, software system, formula, technique, or production method during the year.

They may also ask whether the client built prototypes, tested materials, modified production processes, improved software functionality, evaluated failures, adjusted tooling, or worked through engineering challenges.

If the client answers yes, the next step is not to assume qualification. The next step is to review project facts, technical uncertainty, documentation, and qualified expenses more carefully.

Helpful R&D documentation may include engineering notes, design revisions, CAD records, prototype files, test records, process logs, production trial reports, quality reports, software development notes, project timelines, employee time records, and technical meeting notes.

CPAs do not need to perform the technical analysis alone. Their role is often to identify clients who may need review and help organize financial records, payroll details, project costs, and entity-level tax information.

Good documentation helps connect the technical activity to the expenses being reviewed. It also helps separate qualified work from routine production, administration, sales, maintenance, customer support, or post-development activity.

One mistake is assuming a client does not qualify because they are not in a traditional research industry. Many qualifying activities occur in manufacturing, software, engineering, food production, plastics, tooling, metal fabrication, and technical services.

Another mistake is assuming all technical work qualifies. It does not. A careful review should identify technical uncertainty, experimentation, business components, qualified expenses, and supporting records.

A third mistake is waiting until filing deadlines to raise the issue. R&D documentation is easier to gather when project teams, finance staff, and technical leaders can still explain the work clearly.

How can CPAs identify clients who may qualify for R&D credits?
CPAs can look for clients developing or improving products, processes, software, formulas, tooling, materials, or technical methods. Qualification depends on technical uncertainty, experimentation, expenses, and documentation.
What industries should CPAs screen for R&D credit opportunities?
CPAs should screen manufacturers, software companies, engineering firms, food processors, plastics companies, metal fabricators, tool and die shops, automation firms, and technical service businesses that perform development or improvement work.
Do clients need a formal R&D department to qualify?
No. Clients do not need a formal R&D department to be reviewed. Many companies perform qualified research through engineering, production, software development, quality improvement, or technical problem-solving teams.
What records should CPAs ask clients for?
Helpful records may include project notes, engineering records, test results, prototype documentation, software development notes, time records, payroll details, supply costs, and documentation showing technical uncertainty and experimentation.
Should CPAs perform the technical R&D analysis themselves?
CPAs may identify potential opportunities and support financial documentation, but technical R&D analysis often requires deeper review of engineering, software, production, testing, or process improvement activity.

The R&D tax credit for CPA clients opportunity can help CPAs identify businesses that may be performing qualified technical work without realizing it. Eligibility is not automatic, and supportable documentation is essential.

RCG Tax Partners works with companies on R&D Tax Credits, Building Cost Segregation Studies, Section 179D Energy Tax Deductions, and Cost Segregation services. For CPA-referred clients across Ohio, RCG provides technical analysis, documentation support, and federal and state R&D Tax Credit guidance.

Ready to review whether a client may qualify for the R&D Tax Credit? Contact RCG Tax Partners to discuss the client’s technical activity, documentation, and next steps.