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Artificial Intelligence R&D Tax Credits

The robotics and artificial intelligence (AI) industries are naturally innovative and dependent on R&D efforts. The US government recognizes the need to invest further in research activities within the field because the most common areas in the AI industry are healthcare, advertising, BI, finance, security, IoT, education, wearables, customer service, robotics, and e-commerce. For that reason, the government and a number of states give tax incentives to all businesses working on improving AI.

In other words, firms that create automation technologies that enhance workflow, communication, data analysis, cloud storage, and user experience qualify for the Artificial Intelligence research and development tax credit. This incentive can offset as much as 22% of the qualifying costs. However, the sums individual firms are entitled to depend on the particular state’s tax regulations.

Qualifying Costs and Activities

The R&D tax credit in the Artificial Intelligence industry helps you recover a portion of the money you spent on supplies, materials, cloud computing, and employee and subcontractors’ salaries. That means you could cover job positions such as AI developers, UX specialists, cloud and mobile architects, software engineers, computer scientists, roboticists, data analysts, natural language processors, and machine learning developers.

A typical claim should include at least one of the following qualifying activities:

  • Creating software that generates suggestions based on client behavior;

  • Testing for NLU (natural language understanding);

  • Upgrading robots to help employees on an assembly line in production;

  • Educating robots to communicate with patients (in order to provide basic instruction or comfort);

  • Increasing virtual assistants’ accuracy (in smartphones, cars, etc.).

Contact us for more details regarding the Artificial Intelligence R&D tax credit. We can maximize your claim through a detailed, expert-led evaluation of your operations. In addition, we will provide a quote free of charge.



What kind of companies can apply?

AI developing 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.

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