Senate Finance Committee Passes Legislation To Extend the R&D Tax Credit For Two Years

The tax extender bill has come early this year! Unlike most years where Congress waits until the last few weeks of December to roll out the bill, they are finally giving taxpayers time to plan ahead for the following year, and taxpayers are grateful.

The legislation, if passed by Congress, will extend the Research and Development Tax Credit for two years, along with the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property and the Controlled Foreign Corporation Look-Through Rule.

The bill would also let companies claim the R&D credit against the Alternative Minimum Tax (AMT), which has caused problems for small and medium sized businesses trying to claim the credit in the past, and it would make the R&D Tax Credit refundable for small businesses, allowing companies that are less than five years old and have less than $5 million in annual gross receipts to take a credit of up to $250,000 against payroll taxes paid on employee wages.

The Biotechnology Industry Organization (BIO) released a statement thanking the Senate Finance Committee for proposing the extension of crucial tax incentives.

“The R&D Tax Credit is a vitally important incentive that spurs private-sector investments in biotechnology companies as they search for new cures and treatments. The credit helps the biotech industry generate thousands of high paying jobs in the biotechnology sector. The R&D Tax Credit is pro-innovation, pro-growth, and pro-America, and we strongly support the provision to make a portion of the R&D Tax Credit refundable, which will improve small, pre-revenue companies’ access to the tax credit.”

If your company is conducting R&D and would like a feasibility study at no cost or if you would like to know more about the government tax incentives, please contact a Swanson Reed specialist for more information.

Capitol Washington DC

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