I have a question about R&D credits and how they work. My software product development business is generated some income this year. I"m told that the R&D credits (a little less than 5% of the wages paid and development expenses as calculated by my CPA) would need to be added back to the income to take the credit.

Why would one add back the credit to income and then take a credit? Wouldn't that defeat the purpose of the credit? What options are available for taking R&D credits and how should one calculate it?