|
The federal research and experimentation tax credit ("research
credit") is a nonrefundable, dollar-for-dollar credit that
offsets income tax liability.
Benefits:
- Maximization of business metrics: EPS/profitability and cash flow,
and a lower effective tax rate
- Development of a methodology for capturing and enhancing credits in
future tax years
What characteristics need to be met to take
advantage of the credits?
- New Product Development of Significant Enhancements to Existing
Products
- Patent Generation
- Culture that emphasizes continuous improvement and process
improvements
- Frequent new product roll-out
- Large consulting fees related to production process
- Existence of a R&D, Product Development or Engineering Department
- Manufacturer of greater than $10 million gross sales
|
