The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) has extended the Research and Development (R & D) Tax Credit Program for tax years beginning on January 1, 2016.

It’s important to note that businesses that are profitable and qualify for R&D tax credits are no longer limited by the Alternative Minimum Tax (AMT) ceiling.

You may be unaware that your business could benefit from this tax credit. Architects, engineers, manufacturers, small businesses, and some startups should take a closer look. The provisions are broader than you might think. Do any of the following apply to your business? If so, we can advise you on your eligibility for the R&D tax credit:

  • Developing an innovative product that is new to the market
  • Engineering and designing a new product
  • Conducting research aimed at discovering new knowledge
  • Searching for ways to apply new research findings
  • Designing product alternatives
  • Evaluating product alternatives
  • Introducing significant modifications to the concept or design of a product
  • Designing, constructing, and testing preproduction prototypes and models
  • Engineering activity to advance the product’s design to the point of manufacture
  • Utilizing systems processing modeling
  • Conducting system and functional requirements analysis
  • Utilizing integration analysis
  • Experimenting with new technologies
  • Experimenting with new material and integrating the material to improve manufactured products
  • Engineering to evaluate new or improved specification/modifications in terms of performance, reliability, quality, and durability
  • Developing new production processes during prototyping and preproduction phases
  • Conducting research aimed to significantly cut a product’s time-to-market
  • Conducting research aimed to obtain more efficient designs
  • Developing and modifying research methods / formulations / products
  • Paying outside consultants / contractors to do any of the above activities

It’s important to evaluate your business’ eligibility before tax season, so call our team with any questions about the R&D tax credit. We’ll be happy to assist you with your planning needs.

To read more, see this article from CPA Magazine.