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VIEWpoint Issue 1 | 2023
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Set to expire on Dec. 31, 2012, the research and development tax credit has once again been renewed as a result of the American Taxpayer Relief Act, impacting a wide range of industries, including aerospace, engineering, manufacturing and food processing. This lucrative credit is overlooked by industries outside of manufacturing and software, however, Doeren Mayhew recently helped an architectural firm claim credits of more than $300,000. Could you be missing out on an opportunity to claim such a credit? Read below for more on the incentive and whether you may qualify.
What qualifies? For research to qualify, it must be undertaken to discover information that is technological in nature and intended to be useful in the development of a new or improved business component. That may include research on new products, improvement of existing products, development of more reliable and cost effective processes, and more.
The credit is designed to cover the following three basic categories of expenses:
How much is the credit? The R&D tax credit is not just a tax deduction; it’s an actual dollar-for-dollar credit against taxes owed or taxes paid. There are two options available to calculate the R&D tax credit:
Sample savings Doeren Mayhew clients have received include:
When should you consider an R&D tax study? Identifying qualified research expenditures generally requires an in-depth discussion about a company. However, the following activities likely fall under the category of qualifying:
To learn more about the credit or whether you qualify, contact our dedicated Tax Incentives Group, with CPAs in Troy, Mich., and Houston, Texas.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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