R&D Tax Incentives

How do you make sure you have maximized your R&D tax credits without exposing your company to painful audit risk? Hire the right team to compile the right documentation and determine the right credit the FIRST time. There is no substitute for experience and that is what the PM Business Advisors offers you.

Our R&D Credit Team is led by Peter J. Scalise, a highly renowned thought leader with over twenty years of experience in identifying, gathering and documenting Federal and State R&D Tax Incentives. Peter’s background extends from servicing privately-held start-up companies to publicly-held Fortune 100 conglomerates.

CPA Firms: Our R&D team is ready to serve you and your clients. You will always get a commitment to excellent quality, reasonableness, and timeliness. We also offer flexible engagement terms and will ALWAYS put “boots on the ground.”

Start-ups: No taxable income? No problem! Several states have implemented refundable or transferable R&D credits, so do not assume you cannot utilize the credits you are generating. Our team can help you combine the tax credits with tax losses and turn that package into capital through tax certificate transfer programs. There are 15 states that currently offer some form of this program.

The PATH Act Significantly Enhances the R&D Tax Credit Program

On December 18th of 2015, President Obama signed into law a sweeping $1.14 trillion dollar funding bill that will keep the federal government operating through September 30th of 2016. In connection to the tax aspects of this comprehensive and pivotal legislation, the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) accomplished considerably more than the typical tax-extenders legislation passed in previous years and truly signifies a dynamic paradigm shift as the PATH Act makes permanent over twenty leading tax incentives while extending other tax incentives over either a five year period or a two year period.

In particular, the PATH Act meaningfully enhanced the R&D Tax Credit Program (hereinafter “RTC program”) on a myriad of levels. As an overview, the RTC program was initially added to the U.S. Internal Revenue Code (hereinafter the “Code”) in 1981 through the Economic Recovery Tax Act of 1981 as a temporary provision of the Code. The RTC program had most recently expired on December 31, 2014. A tremendous paradigm shift to the RTC program was made possible through the PATH Act which not only renewed the RTC retroactively for all of calendar year 2015 but most importantly made the RTC program permanent. In addition, the enhanced RTC program has been considerably restructured to:

• Allow eligible small businesses (i.e., $50 million or less in gross receipts) to claim the credit against the Alternative Minimum Tax (hereinafter “AMT”) for tax years beginning after December 31, 2015; and

• Allow eligible startup companies (i.e., those with less than $5 million in gross receipts and earning revenue for less than 5 years) to claim up to $250,000 of the credit against the company’s federal payroll tax for tax years beginning after December 31, 2015.

Please contact Peter J. Scalise to discuss the scope and application of the PATH Act and its impact on your R&D Tax Credit claim and/or for assistance in identifying, gathering, and documenting a sustainable R&D Tax Credit claim.

 

States Offering R&D Credit:

                             States Without R&D Credit

Alabama
District of Columbia
Missouri
Montana
Nevada
Oklahoma
South Dakota
Tennessee
Washington
West Virginia
Wyoming