The Benefits Of The Research And Development Tax Credit
32817 09/18/2015 Taxes 359 /has been working on several projects in different states such as Utah, Texas, Arizona, Louisiana, CalifornIn recent years, the IRS has broaden the scope of which industries can apply for this valuable credit. Thus, more companies are taking advantage of this strategic financial planning tool given that it increases its market value and boosts the company’s bottom line. The qualified research expenses can include wages for in-house employees who conduct R&D activity. It can also include up to 65% of a company’s contractors and any supplies used for research activity. Very important to note is that all the qualifying research activity and expenses must be completed in the US.
Companies also have the opportunity to amend past tax returns, for any open tax years, to claim the credit. The credit’s ultimate goal is to offset any prior, current, or future tax liability. Unknown to many, this credit can be carried forward 20 years. This is especially important for startup companies that claim the credit yet have little to no tax liability but see the value in banking these valuable credits for future use.
This credit can be obtained on the federal and state level. It is a dollar-for-dollar deduction on both your federal and state tax liability. There are currently 38 states that offer the R&D Tax Credit. The R&D Tax Credit requirement legislation varies from state to state. Recently Kuhler ia, New Mexico, and Georgia, just to name a few. Our clients are thrilled to benefit at both levels!
Many industries can qualify for this strategic financial planning tool. Kuhler has seen the highest applicants in engineering (all disciplines), aerospace, software development, startups, medical device, and manufacturing (all disciplines). We look forward to wrapping up tax year 2014 and working on tax year 2015 here shortly.
This article was written by a Kuhler Tax Credits’ associate. For over 25 years Kuhler has focused on tax credit services and has been recognized as a national tax incentive leader. CPAs and companies trust Kuhler’s experienced team to identify, assess and recover valuable state and federal tax credits, incentives, and deductions. Kuhler’s main services include, Federal and State Research & Development Tax Credits, Section 179D Energy Efficient Federal Tax Deduction, California Sales and Use Tax Exemption.
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