Claim R&D Contract Work Credits in New Jersey

Posted by Jeffrey Feingold on 03.03.14

Only a third of those eligible for R&D Tax Credits are claiming them. Don't miss out on this great opportunity because of lack of knowledge. Request a FREE, No-Risk Assessment or contact Tax Point Advisors' directly. We'll help you determine your Qualified Research Activities and estimate the amount of the R&D credits for which you are eligible. We'll send a team out to interview key personnel before we advise you about potential tax savings and the benefits of doing an R&D Tax Study. There is no cost and no obligation. We are so confident that we can save you money, that there is no charge for the assessment. Contact us today to see how much you can save!

"What are the R&D Contract Work Credits?"

The R&D Contract Work Credits (or Research and Development Tax Credit) is not a deduction for your company's income tax.  It is a bottom line credit against the taxes owed.  There are many advantages to this credit:

  • Since it is a dollar for dollar credit against taxes owed, it can save companies thousands of dollars, and often hundreds of thousands.
  • This is not a use it or lose it tax break. It can be carried forward for up to 20 years and used when you need it.
  • It is available for all open tax years (usually 3-4 years) and sometimes for closed ones.
  • Companies that claim the R&D Tax Credit see immediate earnings-per-share (EPS) and overall effective tax rate benefits.

"How do we become eligible for the R&D Contract Work Credits in New Jersey?"

General contractors, mechanical contractors, and electrical contractors may all qualify for this tax credit.  If you have an engineer on staff, you probably qualify. Take a look at the type of work you do.  If you have to figure out how to do an installation in a way your company never did it before, you qualify.  That would be considered development work.

You qualify for the New Jersey R&D Contract Work Credits if:

  1. You qualified for the Federal R&D Tax Credit. This is best described as:
  • Scientific experimentation or engineering activities designed to aid in the development of a new or improved product, process, technique, formula, invention, or computer software programs held for sale, lease, or license, or used by the taxpayer in a trade or business.
  • The taxpayer's principal purpose for conducting the research is to use the results of the research in the active conduct of a future trade or business.
  • Research and development work do not have to be new to the industry, just new to your company.
  • 2. You paid or incurred qualified research expenses while conducting research or development work in New Jersey.

A credit for increased research activities is allowed based on qualified expenditures made in taxable years beginning on and after January 1, 1994.

  • It provides a credit of 10% of the excess qualified research expenses over a base amount plus 10% of the basic research payments.
  • If the research credit cannot be used because of tax liability limitations, it may be carried forward for either 7 or 15 years.
  • Effective for tax periods beginning on and after January 1, 2012, corporations will be able to use research and development tax credits to reduce up to 100% of their New Jersey tax liabilities; eliminating the 50% liability offset limitation that previously applied.

How can I get help with claiming the New Jersey R&D Contract Work Credits?

Call us at Tax Point Advisors, the foremost authorities on R&D Contract Work credits, for help with your claim.  We serve companies of all sizes as well as CPA's for their clients. The advantages of Tax Point Advisors include:

  • We make a bullet-proof, audit defensible Tax Study with full documentation for both federal and state R&D Tax Credits.
  • We are the only company to be industry-leading audit successful.  We have never had a credit denied under audit.
  • We are comprised of a team of CPAs, engineers, and tax attorneys.
  • A Tax Point Advisors partner manages each case study.
  • We are the only firm who uses an independent, third party tax attorney and IRS audit defense expert to review our studies before they are completed.

Contact us today for a stress-free experience that will save you money.


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