The state of New Jersey allows a qualified business enterprise to claim a state R&D tax credit for these qualified research expenses.
Are you afraid to claim the R&D tax credits?
If you are, you are not alone. Many companies in the U.S. are afraid to claim the R&D tax credits that are truly theirs because they don't want the hassle and expense of an audit. According to the IRS, only about 10% of eligible companies claim the R&D tax credits. That's a sad statistic considering how lucrative these tax credits are, and how businesses need cash during these hard economic times. This low number of taxpayers claiming their R&D tax credits falls in two categories -- they don't know about them, or they are afraid they will get denied in an IRS audit. The R&D tax credits are one of the most lucrative credits available to businesses.
With all the drama and complexities of 2020, the closing months of the year are at least starting to show some light of clarity and new beginnings. From the announcement of potential lifesaving vaccines to, of all things, new announcements for the deductibility of Payroll Protection Plan funding, taxpayers now can sigh a little relief from a difficult year.
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.
If you are a company with qualified research and development work, the R&D tax credits apply to you. These credits can make a lot of difference in your company's bottom line. They are some of the most lucrative tax credits available on both the federal and state levels. You can claim them even if you're unprofitable.
Many contractors do not realize the following activities related to system design and development may qualify them for R&D tax credit savings.
You may be surprised to find out that electrical contractors may be able to qualify for R&D tax credits. Most of America is. R&D tax credits aren't only for those developing new products. They also apply to new processes and to new designs. If you have come up with a new way of doing things in your company, you may qualify - even if others in your industry are already using the method.
When you hear the words, "R&D tax credits," if you think of aggressive tax planning, you are not alone; however, you would be mistaken. In fact, the misconception that tax relief involves aggressive tax planning is a common one. It seems every day there is news of a corporation trying to dodge paying their 'fair' share of taxes by using aggressive tax planning. While it is true that some companies may push the envelope of what is legal and perhaps moral when it comes to paying taxes, this has nothing to do with R&D tax credits.
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!
Some companies are hesitant to utilize the R&D tax credit because they have the misconception that R&D tax credits are invisible. While this has been an issue in the past, changes in the tax code have made this a misconception. Now it is easier than ever to demonstrate to senior management the advantage of R&D tax credits.
