Could Changes in R&D Tax Credits Reduce Your Tax Bill?
Businesses all over the United States, from Ohio to California, are winning when it comes to recent changes for R&D tax credits. The tax credits are considered to be one of the most generous offerings for businesses in America, and thanks to the Obama administration’s proposal, things are about to get even sweeter. This could mean that there’s some excellent news in store for small- to medium-sized businesses looking to spend on technological developments and research in the near future.
Good News for Multiple US Businesses
The new rules are in the hands of the US Treasury Department. These rules are expected to remove many of the restrictions that are currently in place in the US tax code. Many small businesses could take advantage of the millions of dollars in savings that the new rules open. Some of the expected advantages include:
- The ability to backdate tax claims by years
- Companies being able to sell prototypes as end products to their customers
- Opening the R&D tax credit to a vast range of companies that are not currently eligible under the current laws
According to the administration officials, the changes are only designed to clarify the current rules, helping to remove some of the confusion that can be experienced when making claims. They state that the changes will not increase the number of eligible businesses that could apply for the 30-year-old credit. However, many tax lawyers see the new rules differently. They see them as a positive move that could be a great giveaway to businesses due to the fact that the IRS is under so much pressure to become more accommodating.
Could R&D Tax Credit Be Here to Stay?
President Obama is keen on the R&D tax credit, and he has vowed to expand the current system and make it a permanent law, rather than one at risk of being removed from the US tax code. In fact, the R&D tax credit was one of the many tax breaks that expired on December 31, 2013, but it will once again continue to be revived as it has been so many times in the past since it was set up in 1981.
Could You Make a Claim?
If you are a business investing in research and development, you may be eligible for the R&D tax credit. If you’re spending on innovation, researching technological products and processes with the aim of creating something new, or improving on current products and processes, you may be able to reduce your tax bill quite substantially. Contact our team of specialist R&D tax advisors to discover if you’re eligible and learn how we can assist you throughout the process.