Take a look at the new Advanced Manufacturing Tax Credit.
Under the new law, the maximum R&D Tax Credit which can be utilized to lower payroll taxes doubles for tax years beginning after December 31, 2022. Eligible small businesses can now reduce payroll taxes by up to $500,000 annually, doubling from the prior limit of $250,000. Another significant enhancement is that the credit can be utilized to reduce the Medicare portion of taxes (before the new law, the offset was only allowed against Social Security tax). Taxpayers with credits in excess of tax liability may carry forward unused credits.
Business owners across all industries could be missing out on potentially tens of thousands of dollars, all from not knowing enough about the Employee Retention Tax Credit (ERTC). Although the eligibility period for the credit was ended retroactively to the end of the third quarter of 2021, the time frame for making a claim under the program will continue for at least three years. This is great news for the many companies across the United States that did in fact qualify for the credit but didn’t know they qualified. There’s still time! Businesses can still claim their tax credits retroactively.
TPA is asking all privately held clients and trusted advisor partners to take a fresh look at the Interest Charge Domestic International Sales Corporation (“IC-DISC”) tax incentive. Even if you are already using the IC-DISC, TPA may be able to help you increase your savings. The incentive permanently reduces the federal tax rate for owners of privately held companies on certain income. The immediate and permanent tax rate decrease on this income is as high as 17%! (40.8% vs. 23.8%). Achieving this arbitrage does not require any change in business operations whatsoever. The IC-DISC is recommended by the U.S Department of Commerce.
Article from taxnotes.com
WASHINGTON – Ways and Means Republican Rep. Jackie Walorski (R-IN) introduced H.R. 8253, the Fostering Innovation and Research to Strengthen Tomorrow (FIRST) Act, which would double the research and development (R&D) tax credit and allow more small business startups to access this credit.
Small Business Week, which runs now through May 6, is an excellent time for Tax Point Advisors to remind small businesses of an outstanding opportunity to claim valuable tax credits for eligible R&D activities.
Does your dairy company undertake activity intended to develop a new or improved product or process for yourself or your customer?
Consider making the R&D tax credit part of your long-term strategic planning and make sure you’re not leaving money you’ve earned on the table.
With many American businesses around the country struggling due to the COVID-19 pandemic, the U.S. government responded by passing multiple stimulus packages and tax credits throughout 2020 and now into 2021. One essential tax credit businesses should be aware of is the Employee Retention Tax Credit (ERTC) which has now been extended through the first three quarters or 2021 at a potential value of up to $26,000 per employee.
Rhode Island enjoys a wealth of strategic advantages for businesses engaged in research activities of all sizes and scopes. Its centralized presence in the Northeast U.S. provides easy access to key centers of national and international commerce. It enjoys the Northeast’s lowest corporate tax rate. Its renowned academic institutions are havens of innovation and serve as incubators for many innovative startups.
