KBKG Tax Insight: R&D Tax Credit – Qualified Research Expenses for Software Development Activities

09/17/2018

What software development activities and expenditures can be included in an R&D Tax Credit claim for software projects? Companies performing qualified research in creating or improving their software may qualify for federal and state R&D tax credits for the software development activities they are already conducting. These credits are a dollar-for-dollar reduction in federal and … Read More

KBKG Tax Insight: Major PATH Act1 Changes to the R&D Tax Credit

08/27/2018

Major PATH Act2 changes to the R&D Tax Credit for the years beginning after December 31, 2015: The federal R&D Tax Credit has provided taxpayers conducting qualified research a significant tax benefit since it was first signed into law by President Reagan in 1981. Although billions of dollars worth of R&D credits were claimed each … Read More

An Interesting Thread To Pull; The South Carolina R&D Tax Credit

08/20/2018

Originally published article by Joseph Toppe from South Carolina Manufacturing Group on August 2, 2018. Stop me if you’ve heard this one before, “South Carolina is a branch manufacturing state.” They tell us there’s not enough headquartering here, not enough research and development, but what if I told you the Palmetto State has a solution, … Read More

KBKG Tax Insight: R&D Credit Opportunity – Improving an Existing Product

06/11/2018

Businesses who are creating a brand-new product may be aware that the expenses associated with the cost of developing the prototype, or first article, of that product can qualify for the Research & Development (R&D) tax credit1. Qualifying expenses can include employee wages, materials used in the construction of the prototype and any third-party contractors … Read More

Join us in Welcoming Chuck Huey to Our Atlanta Team

03/06/2018

We are pleased to announce that Chuck Huey has joined KBKG’s Atlanta team as Senior Manager and leader of the Southeast Research and Development (R&D) Tax Credit Services group. Chuck comes to KBKG with 10+ years of working in the Atlanta area, exclusively on R&D tax credits leveraging his experience as an engineer. He has … Read More

KBKG Tax Insight: Avoid Common R&D Expense Documentation Errors

01/14/2018

Business owners are often surprised to learn they may be able to claim the Research & Development (R&D) tax credit. The credit was originally created as way to encourage American companies to conduct R&D activities domestically. While initially thought to apply to large companies with formal R&D departments, “smaller businesses” in a wide range of … Read More

KBKG Tax Insight: Tax Reform & The R&D Tax Credit

12/21/2017

It’s been over thirty years since the tax code has been modified to this extent. It has been a talking point for politicians since the Reagan administration brokered the bipartisan Tax Reform Act of 1986. However, the divide between the political parties have kept it a talking point since then, until now. The Tax Cuts … Read More

KBKG Tax Insight: Maximizing the Value of the R&D Tax Credit – Pharmaceutical & Life Sciences Industry

11/27/2017

It is no secret that many Pharmaceutical and Life Sciences companies (“Companies”) conduct research and development activities that qualify for numerous tax incentives, including the Research and Development (R&D) tax credit. Recent groundbreaking legislation created a level of certainty for tax planning purposes and also includes provisions geared towards providing significant benefits to small businesses … Read More

KBKG Tax Insight: Effects of Tax Reform on R&D & Orphan Drug Credits

11/10/2017

Senate Republicans released their own version of a tax plan on Thursday (November 9, 2017), just a week after the House proposal was unveiled. Although both plans keep the research and development tax credit in place, changes in the tax code will require some additional planning for taxpayers currently claiming or those planning on claiming … Read More

KBKG Tax insight: Tips for Documenting Qualifying R&D Expenses

10/26/2017

Every company seeks effective ways to reduce their overall tax liabilities. Although traditional tax planning can certainly reduce business taxes, there is often a limited impact, leaving owners and managers searching for additional savings opportunities. The good news is that the Research and Development (R&D) Tax Credit is available to qualifying companies that have or … Read More

IRS Issues Guidance Around ASC 730 and the R&D Tax Credit

09/29/2017

According to a new guidance released by the IRS, the Large Business and International Division which serves corporations, subchapter S corporations, and partnerships with assets greater than $10 million are instructed to accept financial statements that comply with the GAAP standards as proof of Qualified Research Expenses (QREs). Ultimately, this new directive could lessen the formally … Read More

KBKG Tax Insight: Maximizing the Value of the Orphan Drug Tax Credit

07/19/2017

  The Pharmaceutical and Life Sciences industry currently faces a range of issues, including the rising costs of discovery and development, major losses of revenue due to patent expirations, and increased complexities due to demanding regulatory requirements. Moreover, developers of orphan drugs must overcome a host of additional challenges that make it difficult to recoup … Read More

KBKG Tax Insight: Illinois Reinstates the R&D Tax Credit

07/07/2017

On Thursday, July 6th, the Illinois state legislature successfully voted to override Republican Governor Bruce Rauner’s veto, giving the state its first operating budget in two years.  Included in the $36 billion spending plan is an extension of the state’s research and development tax credit through December 31, 2021.  The research and development (R&D) credit … Read More

KBKG Tax Insight: New R&D Payroll Tax Credit Estimator tool

05/02/2017

The R&D tax credit is now permanent and for the first time ever, small businesses and start-ups can take advantage of this lucrative tax credit. Every year, billions of dollars are given to qualified businesses. Estimate your tax savings using our quick, simple R&D Payroll Tax Credit Calculator and save up to $250,000. Author: Kevin … Read More

KBKG Tax Insight: Monetize R&D Tax Credits: Start-ups and Small Businesses

02/11/2017

What start-up or small business wouldn’t want an extra $250,000? Thanks to The Protecting Americans from Tax Hikes (“PATH”) Act of 2015, there is a new opportunity to monetize research and development (“R&D”) tax credits. Start-ups and small businesses who were previously unable to realize a benefit from this lucrative incentive should reassess R&D tax … Read More

KBKG Tax Insight: IRS Issues Final Regulations Surrounding the Qualification of Internal Use Software towards the R&D Tax Credit

10/04/2016

On October 4, 2016, the Internal Revenue Service issued final regulations which provide guidance on the qualification of internal use software (“IUS”) for purposes of the Section 41 Credit for Increasing Research Activities. The final regulations (TD 9786) address many of the comments received regarding the proposed regulations that were released in January of 2015. … Read More

Research Tax Credit Opportunities for Architects and Engineers

05/17/2016

Architecture and engineering firms may want to take another look at the often forgotten Research & Development (R&D) Tax Credit. Many may be eligible for federal and state research credits without realizing it. Historically, the R&D Tax Credit was geared to only benefit large companies; mostly in the manufacturing, software, high-tech and pharmaceutical industries. However, … Read More

R&D Tax Credit Expanded for Small & Midsize Businesses

12/18/2015

Congress is spreading some cheer this holiday season in the form of tax breaks for both businesses and individuals. The Protecting Americans from Tax Hikes (“PATH”) Act of 2015 was passed by both the House and the Senate and is a groundbreaking $650 billion tax extender bill aimed at providing taxpayers certainty and opportunity into … Read More

R&D Tax Credit for the Food & Beverage Industry

06/08/2015

With the challenge of feeding an ever growing population, food & beverage companies in the United States are forced to increase their research and development efforts to meet demand. In addition to providing more options, food and beverage manufacturers are fighting to keep up with trends in the market place which include the reduction in … Read More

House Passes Permanent Extension of the R&D Tax Credit

05/22/2015

On May 20th, the US House of Representatives passed HR 880, making the Research & Development Tax Credit permanent. The House bill is called the American Research and Competitiveness Bill of 2015. HR 880 provides no revenue offsets which will likely be met with a presidential veto, consistent with what President Obama has promised to … Read More

R&D Tax Credits for Agriculture and Farming

02/18/2015

It may be a surprise to many that food science activities typically associated with agriculture and farming can benefit from the Research & Development (R&D) tax credit. With advances in the food sciences and the challenge of feeding a growing population, those in the agriculture industry have the opportunity to claim and benefit from the … Read More

Treasury Releases Proposed Regulations on R&D Credits for Internal Use Software

01/20/2015

On Friday, January 16, 2015, the Department of Treasury issued proposed regulations regarding the applicability and inclusion of Internal-Use Software as part of the IRC Section 41 ‘Credit for Increasing Research Activities,’ providing increased availability of the research and development tax credit for a greater number of entities, particularly small to mid-sized taxpayers. These proposed … Read More

House on the verge of voting on Tax Extenders including the R&D Tax Credit

12/03/2014

Last week, congressional aides to Senate Majority Leader, Harry Reid (D-NV), and House Ways and Means Committee Chairman, Dave Camp (R-MI), were reportedly nearing a deal to address many of the tax provisions that expired at the end of 2013. The reported value of the deal was in excess of $400 billion. Many of these … Read More

How will the 2014 Midterm Elections Impact tax extenders?

11/07/2014

Not since World War II have Republicans had this large of a majority in Congress. The results from the 2014 midterm election are a staggering blow to Democrats. Prior to the 2014 midterm election, the Democrats had control in the Senate (53 out of the 100 seats with 2 Independents that caucus with the Democrats), … Read More

Research Tax Credit Opportunities for Architects and Engineers

09/11/2014

Although Architecture and Engineering (A&E) firms don’t often claim tax credits, many may be eligible for Federal and state research & development (R&D) tax credits without realizing it. Historically, the R&D tax credit was geared to only benefit large companies; mostly in the manufacturing, software, high-tech and pharmaceutical industries. However, significant changes to the tax regulations … Read More

R&D Tax Credit Now Allows ASC on Amended Returns

06/02/2014

In a surprising, and long overdue modification to the Section 41 Research & Development tax credit, Treasury announced TD 9666 allowing taxpayer’s the opportunity to use the Alternative Simplified Credit (“ASC”) calculation methodology on amended returns in cases where the credit was not previously claimed on a return. Prior to this announcement, the taxpayer’s were … Read More

Regulations TD 9666

06/02/2014

Today, the Department of Treasury announced regulations TD 9666 that allows companies to claim the R&D Alternative Simplified Credit (ASC) on amended returns. This regulation significantly increases the amount of credit a company can claim. Experts are predicting that this will encourage small and medium size businesses to act and reassess the benefits of claiming … Read More

R&D Tax Credit Update

04/08/2014

The federal tax credit for “increasing research activities” – commonly known as the R&D credit – is one of several “tax extenders” currently being discussed by lawmakers. The credit expired at the end of 2013, but the expectation is that it will be renewed, as it has done consistently since the credit was first enacted … Read More

R&D tax credit webinar Q&A session

11/19/2013

The R&D Tax Credit program is one of the most valuable tax credit offered by the federal government, and most state government. If your company is doing any type of R&D, you could save hundreds of thousands of dollars annually in state and federal taxes, up to 10% of your annual R&D costs. KBKG is … Read More

Research and Development Webinar Questions and Answers

09/17/2013

Questions Asked by Attendees from the Research and Development September 17 Webinar Q: 2 S-Corp owners develop iPhone applications. Gross receipts = $1.5 Million salary, $100 each owner, will they possibly qualify for credit? All corporate tax is passed through to them individually and they are subject to AMT. A: Great question. As you pointed … Read More

Answers to Questions Raised on the R&D Tax Credits Webinar

08/21/2013

Thank you for attending our RD 101: Research & Development Tax Credit Overview webinar on 8/20/13. We hope you enjoyed the course and find the information useful towards understanding the R&D Tax Credit. We encourage you to reach out to us for any additional concerns you may have regarding the material covered in class. As promised answers … Read More

Texas Governor Signs R&D Credit Legislation

06/17/2013

On June 14, 2013, Texas Governor Rick Perry signed into law HB 800 reinstating the research and development (R&D) tax credit for Texas companies. Although not permanent, both the sales tax exemption and research credit are extended through 2026 and are expected to be a boost to Texas manufacturing and high-technology industries. Details regarding the … Read More

Texas Research and Development Tax Credit Legislation on Governor’s Desk

06/05/2013

On May 25, the Texas state senate approved HB 800 and sent it to Governor Rick Perry for his signature. The bill reinstates franchise tax credits for companies conducting qualified research and development (R&D) activities within the state. The Texas R&D credit was repealed in 2006, but proponents of the bill claim the tax incentives … Read More

Maryland’s Research and Development Tax Credit Extended and Annual Limits Increased

05/01/2013

On April 9, 2013, Maryland’s Governor, Martin O’Malley, approved HB 386 extending and expanding Maryland’s research and development (R&D) tax credit. Maryland’s current R&D tax credit law provides a credit against regular Maryland tax for companies incurring qualified research expenses (QREs) within the state. Maryland currently caps its R&D credits at $6 million per calendar … Read More

Florida Research & Development Tax Credits are Available for 2012

01/23/2013

For tax years beginning on or after January 1, 2012, the State of Florida allows a qualified “business enterprise” to claim a state R&D credit of 10% for qualified research expenses (“QREs”) incurred in Florida (2012 Florida Statute §220.196). Is there an application process? Yes. An application process must be completed in order to be … Read More

R&D Tax Credit Receives Retroactive Two Year Extension through 2013

01/16/2013

Congress passed a two-year extension for the R&D Tax Credit as part of the Fiscal Cliff Relief bill. The “American Taxpayer Relief Act of 2012” (the Act), which the President signed into law on Jan 2, 2013, extends the credit retroactively and is now set to expire at the end of 2013. This is the … Read More

KBKG Responds to Technical Questions Raised on the R&D Tax Credits

12/12/2012

Thank you for attending our Research & Development Tax Credit Overview webinar. We hope you enjoyed the course and find the information useful towards understanding the R&D Tax Credit. We encourage you to reach out to us for any additional concerns you may have regarding the material covered in class. We hope that you will … Read More

Tracking Time Spent on R&D

12/03/2012

Dallas Business Journal Interviews The KBKG Director of R&D Tax Credits The Dallas Business Journal interviewed Bruce Stubbs, Director of R&D at KBKG Inc., in an article titled “Extra Credit for Innovation”. In the interview, Bruce recommends using a time tracking system for employees who are involved in R&D. “Anybody that touches the project, you … Read More

KBKG Responds to Technical Questions Raised on the R&D Tax Credits

06/19/2012

Does the provision for eligible small business credits to eliminate AMT in 2010 carry forward into 2011. If a credit is generated in 2011 can it fully offset AMT? The 2010 R&D generated are the only credits which can be used to offset AMT. This was a special rule for 2010 only. The 2010 credits … Read More

Take Advantage of the R&D Tax Credit

02/07/2012

With tax season rapidly approaching, now is the perfect time to evaluate the potential savings that the R&D Credit can provide before filing your 2011 tax return. The R&D credit allows companies to receive tax credits for activities that incur expenses intended to develop new, improved and more reliable products, processes and formulas. The federal … Read More

Research & Development Tax Credit Finally Permanent? Not yet but maybe soon!

07/26/2011

Many in industry certainly wish this would become a reality and feel it’s long overdue. The Research & Development (R&D) Tax Credit (“Credit”) has been extended 14 times since first enacted in 1981. Historically the Credit has been temporary in nature and when extended it has generally been extended for two year periods, often retroactively. … Read More