CPE Course: What Are R&D Tax Credits?

The CFOs and Controllers of every innovative company in America have been watching Congress with baited breath all year. As part of Donald Trump's Tax Cuts and Jobs Act (TCJA), the way that American businesses can deduct R&D expenses completely changed this tax year — the new amortization rules will cost innovators dearly.

Because the change was detrimental to companies that have been an engine of growth for America, there was an expectation that the law would be changed before it ever took effect. When a deal was not reached by April, almost every accountant advised clients to extend until October. The thought was that a deal would almost certainly be reached by then — and that it would retroactively forgive the higher rates for this tax year. But, as the Extension Deadline approaches, it's becoming less and less likely that Congress will strike a deal for 2023 taxes.

Here's what Grant Thornton wrote in their newsletter:

"Democrats and Republicans each kept up their share of posturing over the ever-elusive deal to trade child tax credit enhancements for restoring research expensing under Section 174, reinstating 100% bonus depreciation, and providing relief for the Section 163(j) limit on interest deductions. A deal is not likely to come together before government funding is set to expire at the end of September. This will likely leave lawmakers with one-last ditch effort to reach a deal at year-end, well past the extended filing deadlines for calendar-year taxpayers.

All the ingredients remain in place for a compromise: Republicans have signaled they are open to child tax credit relief and Democrats have acknowledged this relief must be proportional to the business provisions. Despite this broad agreement on parameter, lawmakers appear no closer to a deal and still seem reluctant to engage in substantive discussions. The Committee for Responsible Budget tried to jumpstart discussion by unveiling an online tool allowing users to adjust the parameters of the child tax credit to achieve various revenue objectives. The response from lawmakers was muted as they continue to dance around the issue and trade barbs over the costs of each other’s priorities."

Schedule a call with one of our experts if you want to learn more about how Section 174 may affect your taxes this year and how we can help you!

Most people think of the R&D tax credit as a tool to help multinational firms invest in expensive lab work and to help tech companies build innovative new products. But in reality, the R&D tax credit is a piece of legislation designed to incentivize innovation across American industries.

The misconception that the R&D tax credit isn’t for all industries means that a majority of eligible companies are missing out on claiming the money they’re owed. That's why Neo.Tax has created the ultimate guide for Apparel R&D Tax Credits.

Does your apparel business qualify for the R&D tax credit?

If you operate in the apparel space, there's a strong possibility that your business qualifies for the R&D tax credit. To be eligible, you need to meet certain qualifications:

1. You are working to eliminate a technical uncertainty.
2. You are experimenting via modeling, trial-and-error, simulation or other methods.
3. The experimentation process relies on a hard science.
4. The goal of this process is to create a new or improved product or system.

What are some qualified research examples specific to apparel businesses?

Some ways your business may be eligible for R&D tax credits include the following:

• Developing new clothing innovations that could be eligible for utility patents
• Designing and developing product and performance specifications for new fabric and material construction technologies
• Developing new manufacturing processes
• Manufacturing, evaluating, and testing samples and prototypes
• Developing new software that allows customers to view inventories, make purchases, and track merchandise online using web or mobile applications

How Neo.Tax can help your apparel business file for the R&D Tax Credit?

At Neo.Tax, we have the expertise, technology, and resources to simplify the process of claiming tax credits. We specialize in assisting businesses, including those in the apparel space, in identifying and documenting qualified expenses to maximize the value of the R&D tax credit. We stay up-to-date with regulatory changes, ensuring that our clients remain compliant with the relevant tax credit legislation impacting their business.

Don't miss out on potential tax credits. Let Neo.Tax help your business navigate the R&D Tax Credit process with ease. Book a call with us today and see how much money you’re owed!

Most people think of the R&D tax credit as a tool to help multinational firms invest in expensive lab work and to help tech companies build innovative new products. But in reality, the R&D tax credit is a piece of legislation designed to incentivize innovation across American industries.

The misconception that the R&D tax credit isn’t for all industries means that a majority of eligible companies are missing out on claiming the money they’re owed. That's why Neo.Tax has created the ultimate guide for Food and Beverage R&D Tax Credits.

Does your food and beverage business qualify for the R&D tax credit?

If you operate in the Food and Beverage space, there's a strong possibility that your business qualifies for the R&D tax credit. To be eligible, you need to meet certain qualifications:

1. You are working to eliminate a technical uncertainty.
2. You are experimenting via modeling, trial-and-error, simulation or other methods.
3. The experimentation process relies on a hard science.
4. The goal of this process is to create a new or improved product or system.

What are some qualified research examples specific to food and beverage businesses?

Some ways your business may be eligible for R&D tax credits include the following:

• Developing new product flavors, appearances, textures, or health benefits
• Developing methods to extend shelf life
• Developing new or improved manufacturing technology, processes, and procedures to increase yield, reduce waste and by-products, improve safety, or reduce labor
• Producing prototype product samples for testing and validation of new recipe formulations
• Designing and developing specialized tools or prototype tooling and machines

How Neo.Tax can help your food and beverage business file for the R&D Tax Credit?

At Neo.Tax, we have the expertise, technology, and resources to simplify the process of claiming tax credits. We specialize in assisting businesses, including those in the food and beverage space, in identifying and documenting qualified expenses to maximize the value of the R&D tax credit. We stay up-to-date with regulatory changes, ensuring that our clients remain compliant with the relevant tax credit legislation impacting their business.

Don't miss out on potential tax credits. Let Neo.Tax help your business navigate the R&D Tax Credit process with ease. Book a call with us today and see how much money you’re owed!