for the R&D Tax Credit
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Qualify for the
R&D Tax Credit
PRODUCTS AND PROCESSES
R&D Tax Credits for the Machining Industry
Refunds are available for companies performing research within the Machining Industry. The research credit provides dollar-for-dollar cash savings each year for companies performing activities related to the development of new or improved products and processes. These benefits could provide much needed cash to hire additional employees, increase R&D, expand production facilities, etc.
Many companies involved with machining are unaware that their efforts within designing and developing their products can yield a large amount of research credits. Examples of R&D activities related to the industry as well as potentially qualifying job titles are listed below.
Examples of Qualifying R&D Activities
- Coding and programming for machinery communication
- Computer-aided design (CAD) and computer-aided manufacturing (CAM) modeling and simulation
- Computer numerically controlled (CNC) programming
- Designing for tight tolerances
- Developing prototype tooling
- Developing robotics and automated technology
- Eliminating or minimizing warpage in welding and fabrication processes
- Experimenting with different types of materials
- Maintaining speed of milling process without breakage
- Maintaining uniform constraints in the lathing process
- Maximizing feeds and speeds while ensuring quality and integrity of the part
- Modeling, simulation, or systematic trial and error
- Special fixture requirements
Potentially Qualifying R&D Job Titles
- Computer Numerically Controlled (CNC) Programmers
- Engineering Managers
- Engineering Supervisors
- Mechanical Engineers
- Machinists
- Manufacturing Engineers
AMT Offset
For tax years beginning after December 31, 2015, eligible small businesses (those with $50 million or less of gross receipts) may claim the research credit against AMT liability.
Up to $250,000 in Payroll Tax
Qualified start-up companies may elect to use up to $250,000 of the research credit against payroll taxes. Treasury Regulations have substantially broadened the range of taxpayers who are eligible for the credit. Start-ups to publicly traded businesses who were previously unable to realize a benefit from this lucrative tax credit should reassess their eligibility.
Estimate Your Benefits with our FREE Calculators
Use our calculators for an estimate of state and federal R&D tax credit benefits or to determine if you can offset payroll tax using the R&D tax credit. It's easy to use and free. If at any time you have questions, contact us. We are here to help you realize your maximum tax benefit.
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Research and Development Tax Credit Insights
Key Changes in Accounting Method Procedures for Section 174 Research Expenditures
10/02/2024The IRS has recently issued Rev. Proc. 2024-34, which modifies the method change procedures for specified research or experimental (SRE) expenditures under Section 174. This updated guidance provides important changes for taxpayers seeking to comply with the amended rules following the 2017 Tax Cuts and Jobs Act (TCJA). Here’s a breakdown of the key provisions … Read More
Senate Votes on Tax Relief Bill for IRC 174 R&E Expenditures, Bonus Depreciation and Section 163(j)
08/01/2024By Jonathan Tucker | Principal, Research & Development Tax Credits In a significant move after months of waiting, the Senate voted on the highly anticipated tax relief for American Families and Workers Act, aimed at easing the financial burden on millions of Americans. Championed by Senate Majority Leader Chuck Schumer to bring a vote in … Read More
KBKG Tax Insight: Identifying Expenditures for the New IRC 174 Capitalization Requirements
07/24/2024By Jonathan Tucker | Principal, Research & Development Tax Credits With the enactment of the Tax Cuts and Jobs Act (TCJA) of 2017, significant changes were made to the Internal Revenue Code (IRC), notably to IRC 174. Starting in the tax year 2022, businesses can no longer fully expense their research and experimental (R&E) costs … Read More
KBKG Tax Insight: IRS Updates Form 6765 to Claim R&D Credit
06/25/2024By Jonathan Tucker | Principal, Research & Development Tax Credits On June 21, 2024, the IRS released an updated draft form 6765 – Credit for Increasing Research Activities, the tax form taxpayers must file with their tax returns to claim the R&D tax credit. This revised draft provides much-needed relief for taxpayers by reducing the … Read More
KBKG Tax Insight: IRS Eases Requirements for R&D Credit Refunds
06/20/2024By Jonathan Tucker | Principal, Research & Development Tax Credits The IRS issued new guidance around amending for R&D tax credit refunds postmarked as of June 18, 2024. This guidance reduces the documentation requirement to be submitted for amending by removing two previously required items. KBKG Insight: With just three documents needed to submit the … Read More
KBKG Tax Insight: Tax Court Denies R&D Credits for Engineering Firm
05/13/2024By Emily Flemmer | Manager, Research & Development Tax Credits In the case of Meyer, Borgman & Johnson, Inc. v. Commissioner No. 23-1523 (8th Cir. May 6, 2024), the U.S. Court of Appeals for the Eighth Circuit upheld the Tax Court’s decision denying research tax credits to a structural engineering firm because the taxpayer’s research … Read More
Tax Alert: DEA Proposal to Ease Restrictions on Marijuana
05/10/2024By Paul McVoy and Bill Taylor | Principals, Research & Development Tax Credits A recent proposal by the Drug Enforcement Agency (DEA) to reclassify marijuana from a Schedule I to a Schedule III drug represents a significant shift in the regulatory framework surrounding cannabis. This change could have profound effects on companies operating within the marijuana … Read More
Simple, Swift, Secure: KBKG’s Dash.tax Transforms R&D Credits Up to $50k
04/29/2024PASADENA, Calif. – April 29, 2024 – KBKG, a premier provider of comprehensive specialty tax services and solutions, proudly announces the debut of Dash.tax, its latest R&D tax credit software solution tailored for CPAs and businesses. Designed for swift and precise outcomes, Dash empowers users to effortlessly generate customized Research & Development (R&D) tax credit … Read More
KBKG Tax Insight: April Update, 174 Capitalization Fix & Bonus Depreciation, 2024 Tax Relief Act
04/24/2024KBKG Tax Insight: April Update, 174 Capitalization Fix & Bonus Depreciation, 2024 Tax Relief Act By Emily Flemmer | Manager, Research & Development Tax Credits Frustration mounts among advocates of a bipartisan tax agreement initially approved by the House in January but has since hit a roadblock in the Senate due to Republican resistance. This … Read More
Arizona Introduces New Research & Development Calculation Method for Tax Year 2023
04/22/2024KBKG Tax Alert: Arizona Introduces New Research & Development Calculation Method for Tax Year 2023 By Elise Rhee| Director, Research & Development Tax Credits Effective for the tax year ended 2023, Arizona has implemented a new calculation method, mirroring the federal Alternative Simplified Calculation (ASC) approach. Notably, if a taxpayer hasn’t incurred qualified research expenses … Read More