How to Spot R&D Credit Opportunities for Your Clients

Feb 28

How to Identify R&D Tax Credit Prospects in Your Client Base

As a CPA, you know your clients’ financials and tax strategies inside out, but spotting R&D tax credit opportunities may not be second nature. Many businesses conduct qualifying activities without realizing it. Here’s how to quickly identify potential R&D tax credit candidates.

1. Target Industries

Certain industries frequently engage in R&D:

Manufacturing – Product/process improvements, quality control.
Technology & Software – Software development, system integrations.
Pharma & Life Sciences – Preclinical research, drug formulations.
Engineering & Architecture – Structural designs, new materials.
Aerospace & Automotive – Part/system design, testing.
Food & Beverage – Formulations, process enhancements.

2. Key Business Activities

Clients may qualify if they:

Develop or improve products, processes, or software.
Experiment with materials, algorithms, or techniques.
Conduct prototyping, testing, or feasibility studies.
Solve technical uncertainties.
Maintain technical documentation (reports, project tracking).

3. Financial Indicators

High R&D Payroll Costs – Engineers, scientists, developers.
Significant Contract Research – Payments to third-party researchers.
Capital Expenditures – Investment in prototypes, testing tools.

4. Questions to Ask Clients

How do you stay competitive in your industry?
Have you improved your products or processes recently?
Do you employ technical specialists?
Have you faced challenges in product/process development?
Do you hold or apply for patents?

5. Confirm Documentation Practices

Time tracking for R&D personnel.
Project management systems logging development efforts.
Testing records, feasibility studies, invoices for third-party R&D.

6. Collaborate with an R&D Tax Credit Specialist

Partnering with an expert ensures compliance and maximized benefits for your clients.

Final Thoughts

Helping your clients claim R&D tax credits isn’t just about tax savings—it’s about strengthening your role as their trusted advisor. Identifying these opportunities reinforces your value, deepens client relationships, and positions you as an essential strategic partner. Don’t overlook the chance to bring significant financial benefits to those you serve.

Please reach out directly with any questions or to get an assist in scoping out opportunities for your clients. Book a call or “skip the call” here.

Matt Roberts, CPA