The Protecting Americans from Tax Hikes (PATH) Act of 2015 made the research and development tax credit permanent, and presented a new savings opportunity to businesses with $50 million or less in gross receipts by allowing these entities to offset the R&D credit against the alternative minimum tax. The changes even allow certain small businesses under $5 million in gross receipts to offset the R&D tax credit against payroll taxes.
The credit provides nearly $10 billion a year in tax savings, but small and medium size businesses are still not taking advantage of the credit while businesses like Amazon greatly reduce or eliminate their tax liability altogether. A common theme among these businesses is that they don't believe they qualify for the credit. To analyze whether your business should look more closely at the credit, start with a couple of simple questions. Does my company make something? Is the product made the exact same way? There is more to it, but these two questions can serve as a baseline for deciding to take advantage of this credit.
Once you've determined that your business qualifies for the R&D credit, let us do the heavy lifting. Contact us in one of our many locations to discuss tax strategies to help your business.