Apply Business Tax Credits Practice Test

A retail clothing store (C corporation) with gross receipts averaging $900,000 per year and 22 employees operates in a leased storefront. In 2025 it spends $8,000 to install a wheelchair ramp, $3,500 to widen an interior doorway, and $2,000 to add accessible signage and adjust fitting rooms to improve access for customers with disabilities. The owner wants to understand which federal credit could apply to these expenditures. Which tax credit is the business eligible for based on its activities?

A C corporation with 110 employees performs product development in the United States and also outsources a portion of coding to an unrelated foreign contractor. In 2025, it pays $900,000 to the foreign contractor and $1.1 million to a U.S. contractor for similar work; both sets of work relate to resolving technical uncertainty through iterative testing. Management asks how contract research costs are treated for purposes of the research credit. What are the limitations affecting the business's credit claim?