When Congress made federal R&D tax credits permanent with the PATH Act of 2015, it included a new provision that benefits startups and small businesses.
Contractors can gain considerable benefits through federal and state research & development (R&D) tax credits. Knowing the specifics about eligibility, which party has rights and risks and how the credits are calculated can go a long way in maximizing your tax savings.
Massachusetts companies can now calculate their Massachusetts research credit using a new simplified method, opening up opportunities to companies that did not meet documentation requirements previously or were obligated to use the maximum amount of 16% per code section 830 CMR 63.38M.1(5)(a)1.
Now that the Protecting America from Tax Hikes (PATH) Act of 2015 has made federal Research & Development (R&D) tax credits permanent, CPA firms have more reason than ever to add this powerful tax-savings tool to the client services they offer.
New legislation broadens the impact of the R&D tax credit for many small-to-midsize businesses by making the credit available to many innovative businesses that previously couldn’t take advantage of the credit because their shareholders were paying AMT.
Many contractors do not realize the following activities related to system design and development may qualify them for R&D tax credit savings.
The state of New Jersey allows a qualified business enterprise to claim a state R&D tax credit for these qualified research expenses.
Less than 33% of companies that qualify for the federal R&D tax credit actually utilize it, due to misconceptions about qualification and the complexity of necessary documentation. The following answers set the record straight.
This simple four-part test will help determine if you qualify for the Research & Development Tax Credit.
The permanent extension of the R&D tax credit is a wake-up call that beckons many industries to evaluate their eligibility to apply for the credits.