The Protecting Americans from Tax Hikes (PATH) Act of 2015 makes the Research and Development Tax Credit (R&D) permanent for costs related to qualified activity incurred after December 31, 2014. No more waiting at year-end to see if the credit will be extended! Hooray!
For small and medium sized businesses, the new rules significantly enhance how taxpayers may benefit from their R&D tax credits:
A potential boost to your cash flow during start up or pursuit of innovation.
The above enhanced R&D credit benefits are significant since an obstacle in utilizing the R&D credits often times is the effect of the AMT or the lack of an income tax being incurred due to start-up company losses. The lifting of these restrictions in certain eligible small business settings is significant in terms of immediate cash flow benefits from the R&D credits.
Does this apply for your business? Now may be the time to find out.
The combination of permanency of the R&D credit and enhanced immediate cash flow benefits from the credit makes it more important than ever for small and medium sized businesses to review their R&D activity. DS+B partners with several R&D credit specialists to help determine if the credit might apply to your business. We can facilitate a R&D credit review to determine if a Research & Development Tax Credit Study is warranted, then guide you through the selection process. For more information, contact Paul Simons to discuss your operations.