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US Research Credit is Now Permanent

Bill passage allows for Research Credit to become Permanent

After passage by the Senate on Friday, December 18th, the President signed into law both a new federal budget, as well as a second bill providing for the extension of a long list of expiring tax provisions. The largest of these was the Section 41 Research Credit, which has now been made permanent. In addition, the credit will now be available to off-set the Alternative Minimum Tax, and for some small business, may be used to offset payroll taxes as well. Watch this space for more information soon. Meanwhile, if you are interested in pursuing a research credit claim, please call us today!

Season’s​ ​Greetings​ ​from​ ​your​ ​friends​ ​at​ ​TCA!

Tax Credit Advisors BulbWith​ ​all​ ​the​ ​news​ ​developing​ ​in​ ​Washington​ ​about​ ​the​ ​proposed​ ​tax​ ​overhaul,​ ​it’s​ ​important​ ​to remember​ ​that​ ​the​ ​existing​ ​tax​ ​rules​ ​are​ ​fully​ ​in​ ​place​ ​for​ ​the​ ​2017​ ​filing​ ​year.​ ​That​ ​means​ ​that when​ ​you’re​ ​filing​ ​your​ ​taxes​ ​next​ ​year,​ ​it​ ​is​ ​important​ ​to​ ​consider​ ​the​ ​federal​ ​Research​ ​Credit and​ ​the​ ​various​ ​state​ ​credits​ ​that​ ​might​ ​also​ ​apply.

The​ ​federal​ ​research​ ​credit​ ​dates​ ​back​ ​to​ ​1981,​ ​and​ ​you​ ​can​ ​expect​ ​to​ ​receive​ ​tax​ ​credits​ ​for eligible​ ​experimental​ ​development​ ​costs​ ​that​ ​your​ ​business​ ​performed​ ​during​ ​the​ ​2017​ ​filing year​ ​that​ ​are​ ​properly​ ​documented.​ ​This​ ​important​ ​incentive​ ​program​ ​​can​ ​amount​ ​to​​ ​​as much​ ​as​ ​​ten​ ​percent​​ ​of​ ​your​ ​qualified​ ​spending​ ​on​ ​people,​ ​materials,​ ​and​ ​related​ ​investments dedicated​ ​to​ ​figuring​ ​out​ ​how​ ​or​ ​whether​ ​you​ ​can​ ​make​ ​something​ ​new​ ​or​ ​improved​ ​by experimental​ ​means.​ ​This​ ​applies​ ​not​ ​only​ ​to​ ​new​ ​products,​ ​but​ ​also​ ​to​ ​improved​ ​ones,​ ​as​ ​well as​ ​new​ ​and​ ​improved​ ​processes,​ ​software​ ​and​ ​equipment.​ ​Also,​ ​because​ ​this​ ​is​ ​a​ ​tax​ ​credit​ ​and not​ ​merely​ ​a​ ​deduction,​ ​the​ ​credit​ ​value​ ​results​ ​in​ ​a​ ​​dollar​ ​for​ ​dollar​​ ​reduction​ ​in​ ​your​ ​tax​ ​bill!

In​ ​addition​ ​to​ ​the​ ​federal​ ​credit,​ ​numerous​ ​state​ ​credits​ ​are​ ​also​ ​in​ ​place.​ ​No​ ​matter​ ​where​ ​in​ ​the US​ ​you​ ​are​ ​located,​ ​we​ ​would​ ​be​ ​happy​ ​to​ ​help​ ​you​ ​figure​ ​out​ ​whether​ ​you​ ​qualify​ ​for​ ​these programs,​ ​and​ ​to​ ​help​ ​you​ ​file​ ​successful​ ​claims​ ​if​ ​you​ ​do.​ ​These​ ​federal​ ​and​ ​state​ ​benefits​ ​are intended​ ​to​ ​encourage​ ​companies​ ​to​ ​keep​ ​engineering,​ ​manufacturing,​ ​and​ ​software​ ​jobs​ ​here in​ ​the​ ​United​ ​States.

Things​ ​to​ ​keep​ ​in​ ​mind​ ​when​ ​considering​ ​research​ ​and​ ​development​ ​tax​ ​credits​ ​here​ ​in​ ​North America:

Many​ ​industries​ ​benefit​ ​from​ ​Research​ ​and​ ​Development​ ​tax​ ​credits

It’s​ ​important​ ​not​ ​to​ ​discount​ ​your​ ​industry​ ​just​ ​because​ ​it​ s​​eems​ ​​like​ ​you​ ​might​ ​not​ ​qualify.​ ​Any company​ ​that​ ​engages​ ​in​ ​experimental​ ​development​ ​can​ ​be​ ​eligible.​ ​The​ ​important​ ​thing​ ​is​ ​that the​ ​experimentation​ ​must​ ​be​ ​intended​ ​to​ ​develop​ ​or​ ​improve​ ​an​ ​existing​ ​product​ ​or​ ​process.​ ​For example,​ ​even​ ​a​ ​manufacturer​ ​of​ ​wire​ ​coat​ ​hangers​ ​can​ ​qualify​ ​so​ ​long​ ​as​ ​the​ ​aim​ ​of​ ​the experimental​ ​effort​ ​is​ ​to​ ​develop​ ​a​ ​new​ ​or​ ​improved​ ​technical​ ​capability.​ ​Such​ ​a​ ​company​ ​might try​ ​to​ ​reduce​ ​scrap​ ​rates,​ ​or​ ​improve​ ​cycle​ ​times,​ ​or​ ​reduce​ ​part​ ​weight,​ ​or​ ​engage​ ​in​ ​any​ ​of​ ​a number​ ​of​ ​other​ ​activities,​ ​all​ ​of​ ​which​ ​can​ ​be​ ​eligible​ ​for​ ​tax​ ​credit​ ​support.

Your​ ​company​ ​does​ ​not​ ​have​ ​to​ ​be​ ​of​ ​a​ ​certain​ ​size​ ​to​ ​be​ ​eligible​ ​to​ ​claim​ ​research​ ​and development​ ​tax​ ​credits

Big​ ​or​ ​small​ ​businesses​ ​can​ ​claim​ ​tax​ ​credits,​ ​as​ ​long​ ​as​ ​the​ ​processes​ ​they​ ​are​ ​developing​ ​and testing​ ​meet​ ​the​ ​eligibility​ ​criteria.​ ​Millions​ ​of​ ​tax​ ​credit​ ​dollars​ ​are​ ​left​ ​on​ ​the​ ​table​ ​every​ ​year because​ ​many​ ​companies​ ​think​ ​they​ ​are​ ​too​ ​small​ ​to​ ​claim​ ​these​ ​credits.​ ​Large​ ​conglomerate corporations​ ​aren’t​ ​the​ ​only​ ​ones​ ​that​ ​can​ ​perform​ ​research​ ​and​ ​receive​ ​funding.​ ​It’s​ ​important to​ ​know​ ​that​ ​even​ ​your​ ​small​ ​business​ ​can​ ​compete​ ​and​ ​claim​ ​research​ ​and​ ​development​ ​tax credits​ ​as​ ​well.​ ​Most​ ​US​ ​taxpayers​ ​who​ ​engage​ ​in​ ​experimental​ ​development​ ​can​ ​qualify regardless​ ​of​ ​company​ ​size.

Canadian​ ​companies​ ​can​ ​also​ ​benefit​ ​from​ ​tax​ ​credits

We​ ​also​ ​offer​ ​our​ ​services​ ​in​ ​Canada,​ ​where​ ​the​ ​federal​ ​Scientific​ ​Research​ ​and​ ​Experimental Development​ ​(SR&ED)​ ​credit​ ​serves​ ​a​ ​similar​ ​purpose.​ ​A​ ​number​ ​of​ ​provincial​ ​credits​ ​are​ ​also available​ ​and​ ​we​ ​would​ ​be​ ​happy​ ​to​ ​help​ ​you​ ​navigate​ ​the​ ​rules​ ​and​ ​requirements.​ ​This​ ​is​ ​all about​ ​keeping​ ​jobs​ ​here​ ​in​ ​North​ ​America!

As​ ​always,​ ​Tax​ ​Credit​ ​Advisors​ ​is​ ​here​ ​to​ ​help.​ ​If​ ​you​ ​want​ ​to​ ​find​ ​out​ ​if​ ​your​ ​company​ ​is​ ​eligible for​ ​research​ ​and​ ​development​ ​tax​ ​credits,​ ​we​ ​can​ ​assist​ ​you.​ ​Contact​ ​us​ ​today​ ​to​ ​get​ ​started.

Join us for the 13th Annual GBMP Northeast Lean Conference!

GBMP LEAN ConferenceJoin us for the 2017 GBMP Annual Northeast Lean Conference. This year’s conference will be held Tuesday and Wednesday September 19th and 20th at the DCU Center in Worcester, MA.

The Northeast Lean Conference was created by the non-profit Greater Boston Manufacturing Partnership (GBMP) to provide services, information and inspiration to Lean practitioners – from those just starting out to seasoned Lean leaders from the manufacturing, healthcare and other industries. The practical learning format features exceptional keynote and breakout presentations, expert panels, peer-to-peer discussions, hands-on simulations, interactive learning and sharing, and great networking opportunities.

Tax Credit Advisors is hosting a booth at the conference to answer any questions you may have about funding for your technical development and how you can earn money while improving your process, product and equipment technologies. We will also have regular presentations at our booth during both days. Each full day at the Lean Conference features numerous attractions, ensuring there’s something for everyone. It would be great to see you there!

Looking to attend? Click here for more information on how to register.

We also have an agenda for the conference available for you to download here. We can’t wait to see you there!

New Tax Code Overhaul Proposals Could Affect You

Money EnvelopeThere is currently a lot of uncertainty about a proposed tax overhaul coming as early as this summer. With information on the web, social media, and other places, it can be hard to discern how this tax overhaul may affect you and/or your business. Call us with any questions and we’ll provide the best analysis we can as more information becomes available.

Overhauling tax codes is never an easy task. Along with the time it takes to pass these new rules and regulations through Washington, long-term effects may not be seen immediately, and any benefits or detriments can take years to fall into place. Tax Credit Advisors keeps up to date with all of these tax codes, rules, and regulations to know how to better serve you and make the most out of your dollars.

The Federal Research Credit has been helping manufacturing and software companies to keep engineering and software jobs here in the US since 1981, and was kept in place after the most recent overhaul in 1986. We are here to help you claim your benefits successfully both at the federal and state levels, no matter what happens in Washington.

Thank you as always for the opportunity to serve you!

Research & Development for Software Updated Regulations

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Binary Code image courtesy of DeviantART user hefeigal

On October 4, 2016, the IRS published new regulations in the Federal Register detailing the rules for claiming software development under the Section 41 Research Credit. These rules are provided in Treasury Decision 9786 (opens PDF in new window). In a nutshell, the new rules clarify three important points:

1) Software that is developed for sale to third parties qualifies for the credit as long as the effort satisfies the key criteria. That is, the software must attempt to achieve a new or improved capability that attempts to overcome technological uncertainty.

2) Some internal-use software that is intended to provide new or improved interaction with third party customers or other external entities can also qualify, provided that a process of experimentation was required in order to achieve the new capability.

3) Software that is intended solely for internal use, such as an inventory control system or the like) is generally not eligible for tax credit support unless the software itself represents a significant gain in the field of computer science.

These basic findings are not new, but the latest update provides clarity to passages that were formerly somewhat ambiguous. Ultimately, the goal of the federal tax credit is to encourage companies to take financial risks, and to do so here in the United States. It has long been recognized that those companies engaging in serious technological development efforts are more likely to weather the storms of downturns and to prosper under favorable economic conditions.

As always, we at TCA stand ready, willing and able to help you with any questions you have about this issue or anything else related to federal or state research credits. Contact us today via email or call us at 508-842-3232 for your free consultation.

2016 LEAN Conference – Thanks for Coming!

Otto and Karen Kunz at LEAN 2016The 2016 LEAN Conference in Worcester was a great success, and we were able to meet and interact with hundreds of attendees representing manufacturing and software companies from all over the country. Held on October 4th and 5th at the DCU Center in Worcester, Massachusetts, people from all levels of many organizations learned more about the types of activities that comprise Lean methodologies. We at TCA staffed a booth for the entire event, explaining how efforts to streamline manufacturing operations, reduce waste and improve reliability can often qualify for tax credit support.

Otto and Karen Kunz are pictured here at our booth and resource center at the show. Did you know that even toothpicks and wire coat hangers can qualify for support? Ask us how!

Join us for the GBMP Annual Northeast L.E.A.N. Conference!

LEAN Conference 2016Join us for the 2016 GBMP Annual Northeast L.E.A.N. Conference. This year’s conference will be held Tuesday and Wednesday October 4th and 5th at the DCU Center in Worcester, MA.

The Northeast L.E.A.N. Conference was created by the non-profit Greater Boston Manufacturing Partnership (GBMP) to provide services, information and inspiration to Lean practitioners – from those just starting out to seasoned Lean leaders from the manufacturing, healthcare and other industries. The practical learning format features exceptional keynote and breakout presentations, expert panels, peer-to-peer discussions, hands-on simulations, interactive learning and sharing, and great networking opportunities.

Tax Credit Advisors is hosting a booth at the conference to answer any questions you may have about funding for your technical development and how you can earn money while improving your process, product and equipment technologies. We will also have regular presentations at our booth during both days. Each full day at the LEAN Conference features numerous attractions, ensuring there’s something for everyone. It would be great to see you there!

Looking to attend? Click here for more information on how to register.

May is Small Business Month

Time to Review your Eligibility for Tax Credits

business people in a meeting at officeSmaller businesses are the ones who can benefit most from the permanent extension of the federal research credit, a change that will greatly enhance the value of the program for all companies. New provisions can offset the Alternative Minimum Tax as well as some payroll taxes. These two changes greatly expand the number of companies that can benefit from this important incentive program.

At Tax Credit Advisors, LLC, we have over 15 years of experience helping companies of all sizes to maximize their R&D tax credits.

Two major new provisions are of particular interest for small businesses:

1) Companies with annual sales revenues under $50 million can now use the credit to offset the Alternative Minimum Tax.

2) Companies with revenues under $5 million per year may be able to offset some payroll taxes, even if they have no taxable income from operations.

These changes greatly expand the number of companies that can benefit from this incentive program. Even if you haven’t been able to participate from this program in the past – or have assumed that your engineering, manufacturing, or software company was too small to qualify – consider calling Tax Credit Advisors, LLC, to discuss how the recent changes might affect your bottom line.

Many small businesses are under the incorrect assumption that they are not qualified to participate or even apply for research and development tax credits. There are a variety of myths surrounding research and development tax credits that we can dispel, including the assumption that your business is simply too small to qualify. 

As always, the key to successfully claiming the R&D tax credit is the supporting documentation. The staff at Tax Credit Advisors will work with you to identify qualifying activities, gather the necessary information, and prepare the required technical reports and financial documents.

Schedule a complimentary consultation today.

New Support for Manufacturing and Software Jobs in the US!

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Binary Code image courtesy of DeviantART user hefeigal

The federal government took significant steps to improve funding for technical development to domestic companies. A major part of this effort involved the federal Research Credit, which is intended to encourage manufacturing companies, software developers and laboratories to keep engineering, manufacturing and other science-based jobs in the United States. The popular Research Credit program (authorized under section 41 of the Internal Revenue Code) was made a permanent part of the law and no longer subject to periodic expiration. This important incentive had been suspended many times since its inception, but is now a reliable support for companies seeking to evaluate the benefits of keeping high-skilled jobs here.

The federal “research credit” is now permanent.

In addition, the following major changes were made to enhance and improve the incentive nature of this important incentive program:

1) For companies with average gross receipts over the past few years of $50 million or less, the credit is now available against Alternative Minimum Tax (AMT) calculations.

2) For companies with average gross receipts under $5 million, the credit may also be taken against employment taxes. This provision allows even companies that incurred a loss during the year to claim benefits.

The overall goal of the program is to encourage companies to keep experimenting to develop new products, processes and equipment in an effort to improve technological capabilities. It is well known that companies investing in these areas are better able to survive downturns, and prosper in upturns, resulting in higher employment and better profitability. This results in a better economy for everyone and a brighter future!

Over the past two decades, Tax Credit Advisors LLC has worked closely with manufacturers and software developers across the continent to identify, document and defend claims for this important set of incentive programs. Our goal is to help keep engineering, manufacturing and software development jobs here. Let’s see if we can help you! Our initial consultation services are absolutely free, so please call or respond via the “Contact Us” link above.

Workforce Training Fund Tax Workshop Session

Money HeapCurious about how your company can save money using state and federal research credits? Join Tax Credit Advisors, LLC for the Workforce Training Fund Workshop Session, hosted by the GBMP and The Workforce Training Fund. Otto Kunz, President of Tax Credit Advisors, LLC will be offering an informative explanation of how these credits can save you money. Learn how easy it is to attain funding for your business’ experimental development efforts; how to go about the application process, how much funding is available, how to follow guidelines, and just how Tax Credit Advisors can help make the process that much easier!

Event Date & Time: Wednesday, January 13, 2016 @ 9:30 am – 11:30 am

Location: GBMP, 60 Austin Street #102, Newton MA 02460

For more information, visit the GBMP website by clicking here!