The Research & Development Tax Credit
Enacted in 1981, the now permanent Federal Research and Development (R&D) Tax Credit allows a credit that typically ranges from 4%-7% of eligible spending for new and improved products and processes. Qualified research must meet the following four criteria:
- Must be technological in nature
- Must be a component of the taxpayer’s business
- Must represent R&D in the experimental sense and generally includes all such costs related to the development or improvement of a product or process
- Must eliminate uncertainty through a process of experimentation that considers one or more alternatives
Eligible costs include US employee wages, cost of supplies consumed in the R&D process, cost of pre-production testing, US contract research expenses, and certain costs associated with developing a patent.
On December 18, 2015, President Obama signed the PATH Act, making the R&D Tax Credit permanent. Beginning in 2016, the R&D credit can be used to offset Alternative Minimum tax for companies with revenue below $50MM and for the first time, pre-profitable and pre-revenue startup businesses can utilize the credit against $250,000 per year in payroll taxes.
What Flink Is and How It Works
The Flink project was led by Professor André R. Studart and his team in Switzerland. Flink is composed of bacteria that are embedded in a hydrogel that allows the bacteria to be molded and printed into scaffolds. The hydrogel can be thought of as the base for the ink as it provides the bacteria with a biocompatible environment which allows for growth and survival. The Flink can then be printed like a normal non-biological ink, such as plastic, from a 3D printer. Professor Studart and his team used a custom-built, four-axis 3D printer.
Uses for Flink
MIT “Flink”
Engineers at Massachusetts Institute of Technology (MIT) have created a similar ink for 3D printing. The MIT ink is also composed of hydrogel and live bacteria cells. The research team, led by Professor Xuanhe Zhao, 3D printed a “live tattoo” that lights up in response to certain compounds. The living ink can be used as materials in wearable sensors and interactive displays. So far, the ink has been limited to application on the skin but the team will continue development to create a multiuse living ink for 3D printing.
Conclusion
Unlike Flubber, Flink is real and medical and biotech firms working with Flink may be entitled to R&D tax credits.
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Charles Goulding and Rafaella July of R&D Tax Savers discuss living ink.