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Specialist advisory agency in federal tax benefits for physicians, Dr. Tax Credit, has launched a new report detailing how almost every healthcare business qualified for research and development credits in 2020.
More details can be found at: https://www.drtaxcredit.com/post/r-d-tax-credit
The new report explains how events related to the pandemic forced most physicians to innovate in their service practices. Most of that innovation could be classed as R&D under federal tax law.
Tax Code IRC Section 41 details a four-part test that must be satisfied in order to qualify for R&D tax credits.
The report provides an example, the implementation of telemedicine services, and demonstrates how any physician who began providing such a service in 2020 could qualify for tax credits.
The first part of the test stipulates that an activity brings about a new or improved process for the purpose of enhancing function, reliability, performance, or quality.
In medical practice, this translates to improved patient outcomes, and the report shows how telemedicine would qualify for this aspect.
Part two of the test requires that the activity has to be based in the hard sciences, specifically computer, biological, medical, and/or engineering.
As explained, telemedicine applies principles of both computer and biological science, and would therefore be acceptable under this component.
In the third part of the test, applicants must demonstrate that the activity conducted was designed to reduce uncertainty.
The report describes how this requirement can be met by detailing the process undertaken to select an appropriate telemedicine product, and then deciding how best to implement it. There was uncertainty in what the final system should be and how it should operate.
The final part of the test requires some form of experimentation. Specifically, simulation, evaluation of alternatives, confirmation of hypotheses through trial and error, testing and/or modelling, or refining or discarding of hypotheses.
As the report explains, most physicians would have considered several products or options for their telemedicine service prior to settling on a final solution. In addition, several methods of training staff and informing patients about the new system would have been considered and trialed.
Dr. Tax Credits work with physicians’ CPAs, bookkeepers and office-managers, as well as physicians themselves, to put together comprehensive research and development submissions for their clients.
Interested parties can read the new report at: https://www.drtaxcredit.com/post/r-d-tax-credit
Release ID: 89002823