How is the Research Tax Credit Disbursed?

The research tax credit provides an attractive way for companies to support their innovation projects. But how exactly is this benefit disbursed?

In most cases, companies do not receive a direct payment. Instead, the tax credit is applied as part of the tax return process—specifically offset against the assessed income or corporate tax. This means the research tax credit acts as a tax reduction, lowering the overall tax burden.

But what happens if the credit exceeds the tax amount owed? In such cases, the excess amount is refunded as a tax reimbursement. This ensures companies can fully benefit from the research tax credit, even if their tax liability is lower.

It’s important to note, however, that companies wishing to claim the credit must not be classified as “companies in difficulty.”