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.
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Don't believe the myths - no business is too small to claim their portion of research and development tax credits. We can help you see if money is owed to you at no obligation to you. Schedule your complementary consultation today.