The Georgia Investment tax credit is designed to service two specific industries; Manufacturing and Telecommunications. The intent is to help these industries grow by making it more affordable to expand and improve facilities. Investment tax credits can be used to offset up to 50 percent of a company’s Georgia corporate income tax liability. If the earned credit exceeds that limit, then the unused credit can be carried forward up to 10 years and applied to future years’ tax liability. Taxpayers generally claim one of the three Georgia credits for the same project and/or jobs. The credits available are (1) the Investment Tax Credit, (2) the Job Tax Credit, and (3) the Quality Job Tax Credit.
According to the U.S. Department of Agriculture, U.S. companies produce over $300 billion of agriculture products annually. Many of these companies are not aware that their research and experimentation activities and related expenses to develop these new or improved products might be eligible for valuable federal and state research and development (R&D) tax credits. For many U.S. agriculture companies, the R&D tax credit can significantly reduce their income tax liability and increase much needed cash flow into their businesses. Below is a case study of a taxpayer in the agriculture business who was able to utilize hundreds of thousands of dollars of R&D tax credits by identifying and documenting their R&D activities.
Mobile Auto Repair
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National Payroll Company
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Manufacturing companies are a perfect fit for federal and state R&D tax credit. While over 60% of the companies claiming federal R&D tax credits are in the manufacturing industry, many manufacturers are still unaware that their company’s manufacturing activities are eligible for the credit. You do not have to be a high-technology or medical research-intensive company to enjoy the financial benefits of these valuable R&D tax credits. For many U.S. manufacturing companies, the R&D tax credit remains one of the quickest ways to accelerate their growth and bottom line profitability.
Starting in 2018, federal corporate tax rates will be reduced from 35% to 21%. While the new lowered corporate tax rate would suggest that credits against tax, such as the R&D tax credit under Internal Revenue Code (IRC) Section 41, would be less valuable as corporations would likely have lower taxes to offset. While this certainly could be the result for some corporate taxpayers, the R&D tax credit actually increases as a result of these new statutory provisions.
The home health care industry is booming and according to the Bureau of Labor Statistics, approximately 1.3 million additional jobs within the home healthcare field will be added through 2020. In fact, they report that those working in home healthcare positions will see a 69 percent growth through 2020. One reason why the home healthcare industry is seeing such accelerated growth is the increase in demand of home healthcare services and facilities. As millions of people reaching an age where they will need some sort of home healthcare. Thus, increasing the expanse of the industry.
The R&D Tax Credit and the software industry complement each other but companies need to know what activities are potentially qualified in order for them to take full advantage of these benefits and opportunities.
One of the most valuable tax credit programs overlooked by businesses is employment-based tax credits. Many companies believe they would not benefit from this tax savings strategy due to the background of employees they hire or the complexity of employment incentive programs.
However, both state and federal employment credits give businesses the opportunity to improve their tax budget and increase their bottom line. While some companies consider administering programs such as the Federal Work Opportunity Tax Credit (WOTC) on their own, a third-party tax consultant often elicits more honest responses from new employees.
The architecture and engineering (“A&E”) industry is the lifeblood of innovative design and construction projects in today’s competitive global environment. A&E firms develop a nation-wide infrastructure and these new projects may qualify for valuable federal and state R&D tax credits. According to the latest U.S. Census Bureau, there are more than 80,000 A&E companies in the U.S. and a clear majority of these firms are not even aware that they are doing research and experimentation activities eligible for the credit.
The Research and Development (R&D) incentive provides an Arizona income tax credit for increased research and development activities conducted in the state, including research conducted at a state university and funded by the company. The goal is to encourage businesses to continue investing in research and development activities in the state of Arizona.