Telecommunications R&D Tax Credits

The entire US population of about 335.5 million relies on the telecommunications industry to keep them connected. The demand for streaming, videoconferencing, and mobile gaming only increased after the global pandemic and lockdowns in 2020. As consumers ask for more data transfer bandwidth, internet service providers, cable companies, satellite companies, and telephone operators have to overcome many obstacles to remain competitive. As a result, they make significant investments in R&D activities that make them eligible for federal and state tax incentives.

In other words, your telecommunications firm can claim the R&D tax credit in the Telecommunications industry if it experiments with unique services or products, novel technologies like AI, or solutions that improve wireless connection. The incentive can help offset a maximum of 22% of overall qualifying costs, but the amount changes according to the company’s location since some states offer higher credit rates than others.

Qualifying Costs and Activities

To become a suitable candidate for the Telecommunications research and development tax credit, your company must invest in these or similar R&D activities:

• Increasing network speed and expanding existing networks (for instance, 5G);

• Using AI to optimize customer experience;

• Improving fraud prevention and network security;

• Developing IoT products like smart cities, managing vehicle fleets, etc.;

• Making new music, chat, or video platforms.

Moreover, your qualifying research expenditures should include staff, subcontractors, materials, cloud computing services, supplies, utilities, software licenses, and travel costs. The credit could also cover wages for your telecommunications solutions architects, telecom project managers, C-suite, data scientists, product developers, electrical engineers, network specialists, and network systems engineers.

Contact us if you want to learn how much of your QREs you can offset with the Telecommunications R&D tax credit. Our experts follow a well-defined claim procedure, from project qualification to complete paperwork, to ensure you receive a maximum potential return. In addition, we charge no upfront fees and will gladly provide a quote free of charge.

FAQs

What kind of companies can apply?

Telecommunications companies that conduct qualifying research activities.

What data do I need to calculate credit?

Claim period gross receipts.

What information do I need to provide?

General ledger expense detail, payroll records, project notes, project lists, emails, purchase orders, and other documents regarding QREs for the claiming period.

Is credit carryforward an option?

Yes, up to twenty years.