Does your company invest in innovation? Research & Development (R&D) tax credits, a dollar-for-dollar reduction in a company’s tax liability, are a valuable incentive for businesses across most industries that engage in activities with the intent to improve or develop new products, processes, or software. While several eligible companies are unaware that they qualify for the tax credit, several are not claiming the entire credit to which they are entitled. Let us help you reap the benefits of factoring the R&D tax credit into your annual strategic and tax planning efforts.

Recent developments from the Protecting Americans from Tax Hikes (PATH) Act resulted in the permanent extension of the R&D tax credit as well as significant enhancements, including:

  • Eligible small and mid-sized business taxpayers have the ability to offset Alternative Minimum Tax (AMT). This incentive is made available for tax years beginning in 2016 for businesses with average gross receipts of less than $50 million.
  • Eligible start-up companies have the ability to offset payroll tax up to $250,000. Companies must have annual gross receipts of no more than $5 million and no more than five years of gross receipts.

How can the R&D tax credit empower your business’s growth?

  • Increase cash flow, earnings per share, and return on investment
  • Create a dollar-for-dollar reduction in your federal and state income tax liability
  • Reduce effective tax rate
  • Receive up to 12-16 cents of federal and state R&D tax credits for every qualified dollar
  • Create a dollar-for-dollar reduction in your federal and state income tax liability
  • Perform look back studies to recognize unclaimed credits for open tax years
  • Utilize the federal R&D tax credit against payroll tax
  • Carry forward the credit up to 20 years

Whether you’re a tech start-up, pharmaceutical developer, product manufacturer or even a financial services corporation, companies across all industries are taking advantage of the R&D credit to empower growth of their business. For questions about how GBQ can assist your company in reducing its tax burden while improving cash flow, contact us today.