Federal Tax Incentives Help Washington State Businesses Thrive

R&D incentivizes businesses to continue efforts improving products, processes or services in The Evergreen State.

Though the federal Research & Development (R&D) tax credit is an invaluable tool for Washington companies of many sizes, it is also one of the most overlooked tax benefits in the current US tax system.

This federal government credit rewards businesses for taking risks and providing jobs. However, not only do Washington businesses often leave money on the table by not claiming the credit at all, but they also frequently fail to claim their entire credit because of lack of knowledge or documentation. This dollar-for-dollar cash reward adds up quickly, but the proper procedure needs to be put in place to maximize one’s rewards.

How Washington companies can apply for the Federal R&D tax credit

From farming to manufacturing to high tech, the Federal credit is available to companies of all sizes and in a variety of industries. If you perform any type of R&D efforts, such as the development of a new product, improvement of a current product, or expanding of a new formula, your best course of action is to work with national tax experts to leverage your activities into a significant credit that makes a difference.

Other activities that qualify for R&D tax credits include:

  • Molding plastics
  • Developing a new mobile app
  • Designing new irrigation systems
  • Researching an energy-efficient process for brewing beer

As you can see, qualified activities come from a variety of industries. There are some activities that do not qualify for R&D credits, however.

Examples of excluded R&D Tax Credit activities include:

  • Research conducted in other countries;
  • Activities that are not rooted in hard sciences, and instead rely mostly on anthropology, arts or humanities;
  • Activities that highlight customer preference, such as market research studies;
  • Activities that simply repeat an already established business activity, without adding anything new

Additional Business Perks Though the State of Washington

While Washington state does not currently have an active state Research and Development tax credit, it does have an active Business and Occupation (B&O) credit for new employees in manufacturing and research & development in rural counties. This tax incentive can quickly add up for Washington state employers. The B&O state tax perk is open to manufacturers, R&D laboratories, and commercial testing facilities located in rural counties or within a CEZ. It credits the following:

  • $2,000 credit/position with annual wages/benefits of $40,000 or less; or
  • $4,000 credit/position with wages/benefits of more than $40,000 annually.

How can National Tax Group help you?

If you are a company owner, there is no risk in reaching out to us for your FREE assessment of benefits. You’re already doing the work to further your company in a fast-paced market, and we can help take it one step further.  Call National Tax Group at 561-257-3436 to start your free assessment.

MIT Study Finds Tax Incentives Can Propel Businesses to the Next Level

When companies are rewarded for research spending through tax incentives, businesses can expand and grow.

Many companies across a variety of industries perform R&D activities – some without even knowing it. This specialty tax benefit is available on the federal level, as well as on the state level. As of 2006, 32 states now offer their own R&D tax credits. Now more than ever, innovation is a key component of the American business landscape. Research and Development tax credits have become a key strategy for minimizing tax liability and ensuring there are funds for small, medium and large companies to reinvest in future research practices.

According to a recently published a study on the effect of R&D tax credits on businesses from MIT, the R&D tax credit fuels high-quality growth, especially in new and smaller businesses on the state level. MIT economist Scott Stern states, “The R&D tax credit is one of the few innovation policy instruments that at relatively low administrative cost, can make a big difference for spurring innovation and entrepreneurship within a region.”

A Cost Segregation Study is a look back in its own right. Performed by a specialty tax engineer, a property and its building elements are surveyed closely to adjust their depreciation timelines as needed. This process can be greatly beneficial to the property owner, as it has the potential to unlock otherwise unused capital. After a study is performed, building owners can see a substantial increase in their building’s cash flow through these significant tax savings.

Both new and established properties can benefit from CSS. In fact, properties that were in service as far back as January 1, 1987 are qualified. Furthermore, property owners can request a tax amendment past the three-year look back statute, and changes can be made without filing an amended return.

R&D Benefits Companies Now and in the Future

Prioritizing new concepts and processes in the workplace creates an environment that encourages change, flexibility, and adaptation. Innovation draws talent, and an inventive environment can increase the number of company employees with high skill levels. A first-rate staff, along with continuous research, can allow a company to achieve
long-term sustainability and sustainable growth over time. Furthermore, companies can use their R&D tax credits to reinvest in more high-quality specialists, continuing the cycle of innovation.

Research and Development tax credits can also be reinvested into more new products, processes, and services. Better technology and product development benefits not only companies, but also their consumers. When businesses qualify for R&D credits, they can then turn around and reinvest into intellectual property conception, prototype production, formula creation, hiring qualified specialists and more. These tax benefits are especially beneficial to ambitious start-up companies and small businesses.

Businesses Looking Ahead Should Consider Specialty Tax Credits

At the end of the day, receiving Research and Development tax credits will allow business owners to more easily attain the innovative activities and high caliber employees needed to continue to be at the forefront of their respective industries. Contact National Tax Group Research and Development tax credits to start the process of obtaining your lucrative tax incentives. Contact us at 561-257-3436 for your free assessment today.

Step Into Our Tax Time Machine – Amend Your Return to Claim Overlooked Deductions

Corporate tax amendments are a valuable way for business owners to tap into unexpected cash flow.

What if you could go back in time and file for missed money opportunities in previous tax years? The term “look back window” is unfamiliar to many business owners, but those acquainted with the practice can leverage it to their advantage.

Tax amendments allow business owners to adjust their taxes now for federal and/or state returns from the past. Some specialty areas of the corporate tax code have the potential to not only benefit the taxpayer during tax season, but anytime during the year with a submission.

Cost Segregation: A Specialty Look Back Study

A Cost Segregation Study is a look back in its own right. Performed by a specialty tax engineer, a property and its building elements are surveyed closely to adjust their depreciation timelines as needed. This process can be greatly beneficial to the property owner, as it has potential to unlock otherwise unused capital. After a study is performed, building owners can see a substantial increase in their building’s cash flow through these significant tax savings.

Both new and established properties can benefit from CSS. In fact, properties that were in service as far back as January 1, 1987 are qualified. Furthermore, property owners can request a tax amendment past the three-year look back statute, and changes can be made without filing an amended return.

Research & Development Tax Credit: Rewarding Innovation

You can still pursue your lucrative 2019 R&D tax credit, even though it’s past the extended July 15th due date. If your business has been investing in the development of new products or processes, you may be entitled to the R&D tax credit on the federal and any available state levels.

The first step would be to verify that your research activities meet the IRS’s 4-part test. Additionally, a tax team can assist you in maximizing any unclaimed tax credits that can increase your business’s bottom line.

45L Tax Credit: Saving Energy Offsets Tax Liability

Builders, contractors and commercial owners who have implemented significant energy savings in their past projects can receive a one time credit of $2,000 per dwelling. The profit from the sale of a project is included in the tax provision.

Taxpayers can look back three tax years to claim credits from projects that are already in use. Furthermore, a 20-year carry forward means some of the taxpayers can use this benefit to reduce or even eliminate their tax liability for two decades going forward.

179D: Tax Deductions for Commercial Building Energy Savings

Congress extended this tax provision for commercial owners in December of 2019. Builders and property owners can take advantage of the deduction through the end of this year. Qualifying dwellings offer taxpayers up to $1.80/sq. ft. deduction if fully qualified, and a $1.20 or $0.60/sq. ft. deduction for partial qualifications. Congress also announced last year that the 179D benefit retroactively includes projects completed in 2018 and 2019.

If designers or builders worked on a government project such as a Federal, State, or local government office or property, there are additional perks. In these cases, taxpayers are entitled to a look-back up to three years.

Don’t Leave Money on the Table

With the end of the tax season comes additional opportunities. Start your free assessment of tax amendments and benefits today by contacting National Tax Group at 561-257-3436.

How to Claim California’s R&D Credit

The nation’s third-largest state offers one of the best Research & Development tax incentives in the country.

The California R&D Tax Credit can be a significant addition to revenue for Silicon Valley startups, Los Angeles Architects, San Diego Breweries and beyond. Any C-Corp, S-Corp-, LLC or Partnership is eligible and should look to partner with a team of national tax experts that can guide them through the process of attaining the lucrative credit.

Although the Research and Development tax credit is open to small, medium and large size businesses, it’s no surprise that companies with the largest footprint often receive the largest R&D tax credits, both in California and across the US. This is mostly due to resources and availability of information. The process, while complex, can be navigated efficiently and effectively by any size business with the right help.

The first step to applying for R&D in California 

Any business that is considering applying for the Research & Development tax credit must consider the IRS’s Four-Part Test. This checklist is outlined in the following ways:

  • Technical uncertainty. An activity performed to eliminate technical uncertainty in regards to the capability, methodology or design of the project or product.
  • Process of experimentation. The business must prove how its components progress step by step from planning, prototypes, testing, and release, and that this process resolves uncertainty.
  • Technological in nature. The project or activity must be rooted in the hard sciences, such as engineering, physics, chemistry, or computer science.
  • Qualified purpose. The business must have undergone the process of creating a new or improved product or process (computer software included) to increase performance, function, reliability, or quality.

California’s R&D tax credit requirements follow those of the federal credit closely. Here are some specific differences:

  • Qualified Research Expenses (QRE’s) must be performed in California to receive the state’s credit.
  • The Alternative Simplified Credit (ASC) method does not exist in California
  • Unused R&D credits can be carried forward indefinitely in California, versus federal credits that can be carried forward twenty years.
  • California has a different definition of gross receipts that should be closely followed

For companies operating from San Francisco to Sacramento, San Diego to Silicon Valley, as well as in other parts of California, the Research and Development tax credit can be a valuable tool for increasing their bottom line. If you are considering claiming your R&D tax credit, partner with trusted tax experts. Call National Tax Group at 561-257-3436 to start your free assessment.

Explore the Benefits of Our Turnkey, Commission Based Affiliate Program

We have earned CPAs over $500k in commissions. Are you ready to partner with us?

Our specialty tax experts have worked with CPAs hand in hand for decades, helping them unearth additional savings for their clients by introducing them to our specialty areas of tax code. When CPAs refer qualified clients to us, we can leverage their business activities into real-world tax savings. In turn, CPAs earn up to 10% commissions for referrals. Our exclusive CPA+ partnership maximizes your client’s dollars while you earn valuable commissions. 

What are the benefits of partnering with a third party?

Partnering with a third-party specialty tax firm allows CPAs to provide unprecedented savings for their clients. For the average CPA, these unique areas of the tax code are hard to focus on, often requiring experts in the field. That’s when our team of tax professionals, engineers and client specialists come in. Our experts will guide our partnered CPAs and their clients step-by-step through the claims process, from assessing eligibility to submitting documentation to the IRS. We also provide audit support at no cost if you or your clients need it. 

Here to help it work best for you

National Tax Group recognizes that every CPA’s relationship with their customer is different and we have tailored our offerings to support that. It is up to you if we interface directly with the client on your behalf or we work through you. We are happy to offer any level of transparency you require.

Offer your clients more

We are proud to partner with CPAs to ensure that their clients are completely satisfied. This is a collaborative process, and we want you to feel like we’re part of your team.

Through our partnership, you will be able to offer these highly lucrative deductions: 

  • 179D Energy Efficient Tax Deduction – Tax deduction rewarded for energy efficiency
  • Research & Development Tax Credit – Tax credit given to businesses performing qualifying research activities
  • Cost Segregation – Engineering-based study that accelerates depreciation and increases cash flow
  • 45L Home Credit – Tax credit rewarded to homebuilders and contractors who incorporate energy efficient measures

Once you sign up for our CPA Partnership+ program, you will receive a welcome package in the mail that includes an introductory gift, a welcome letter, and an informational pamphlet for your office and clients. Additionally, our team will work with you to identify what clients are eligible for our service areas and provide you with dedicated support throughout the entire process. Partner with us to expand your tax reach and add savings to your clients’ wallets today.

Learn about our CPA Partnership+ Program and start earning commissions.

Leverage Your Employee Wages into Research & Development Tax Credits

R&D tax credits reward companies with employees performing innovative research tasks.

Many business owners are still learning about the federal Research and Development tax program and its generous rewards for corporate taxpayers. One important aspect of the R&D Tax Credit is the ability for it to integrate payroll taxes in calculating your yearly credit. For many businesses and startups, this is especially valuable. 

Investing in Employees Could Result in Even More Tax Credits

A Los Angeles based architecture firm hired us to examine and audit their 2019 tax season to verify if their business qualified for additional R&D tax credits. After their free initial assessment, we closely reviewed the activities performed by the company staff for Qualified Research Expenditures (QRE), past projects and payroll hours. 

Our tax experts know that employee wages can greatly affect the overall improvement of a company’s tax situation. Our staff received the client’s submission of employee hours, and noted a blind spot in how the company reported employee time. Our staff predicted we could increase the firm’s R&D tax credit by reexamining the employees’ activities. 

We took a second look at specific tasks that the employees were doing that the client had disregarded as insignificant. Our complete review made a big difference in how employee tasks were categorized, and the client saw a $42,000 overall increase in their qualified employee wages.

After our thorough review, the total qualifying employee wages increased by over $42,000.

Schedule Your Free Assessment

At National Tax Group, we can examine your employee tasks and record them to comply with the detailed R&D tax credit guidelines. We have over 20 years of expertise in the field with real-world results. Call our national tax experts at (561) 257-3436 to schedule your free initial assessment.

Ohio Businesses Can Capture Up to Three Years of Unclaimed Tax Credits

This government-sponsored program benefits Ohioans who are blazing the trail in innovation.

What is the Research & Development Tax Credit?

The R&D tax credit was established in the 1980’s as part of a list of sweeping moves to stimulate the economy. Ohio businesses in the industries can leverage R&D to gain credit back on their taxes, with the idea that they will then reinvest in new jobs and growth to support the American economy. 

The Ohio R&D tax credit equals 7% of Ohio qualified R&D expenses in excess of the average tax liability of the three prior taxable years. There is no special application or approval process for this tax credit; the credit may simply be claimed on a tax return. Any unused portion of the tax credit that businesses do not use may be carried forward for as many as seven years.

Who Can Claim It?

Any business currently performing Qualified Research Activities (QRA) in the state of Ohio is qualified. All C-corporations, S-corporations, LLCs and partnerships can all claim R&D on their tax returns. However, while this process is accessible and sounds simple, it can also be quite intricate. Therefore, we recommend the process for itemizing and reporting R&D activities be done with a team of tax experts.

Request Your Free Assessment

At National Tax Group, we will not only fill out your tax forms, but we will also provide a comprehensive report of your company activities and equip you with IRS audit-proof documentation. Call our tax experts today at (561) 257-3436 to see if your startup qualifies for a lucrative R&D tax credit. Your initial assessment is always free. 

You are Likely Missing Out on Specialized Tax Incentives that Your Accountant May Not Know About

Reap significant tax-savings through government-sponsored credits and refunds

Many companies of all sizes are not claiming the incentives they’re qualified for simply because they don’t know they are available. Our goal is to help as many businesses as possible become aware of the tax benefits that they qualify for, so that they can reinvest back in the business. Browse our tax specialties to find out how you can minimize your tax liability and maximize your profits.

Research and Development Credits Reward Your Innovation Efforts

If your company develops, designs, or improves a product, process, or software, there is a good chance you qualify for federal and state R&D tax credit in your area. To officially qualify, you must first pass the IRS’s R&D 4-Part Test. The test evaluates the research initiatives at your company and breaks it down into 4 categories: Nature, Purpose, Process, and Uncertainty.

Once we determine that your research and development activities qualify for R&D Tax credits, our national tax experts will record all qualifying research expenses and submit the audit-proof claim to the IRS.

Cost Segregation Studies for Your Commercial Properties

Most commercial buildings and facilities that were constructed, remodeled, or purchased after 1987 can benefit significantly from a cost segregation study. The first step in the process is to have an experienced cost segregation engineer conduct a thorough study of the property. The advisor will analyze each building component and record all relevant information such as cost data, building plans, and lease agreements.

The goal of the study is to increase your cash flow by accelerating depreciation deductions and deferring federal and state income taxes. Cost segregation is a complex and lengthy project for any business or property owner, so it is recommended that you hire a team of national tax experts with an engineer on staff to complete the process from start to finish.

45L Credit Rewards Energy Efficient Dwellings

Building owners, designers and contractors who have installed energy-saving elements to newly constructed multi-family projects can obtain this extremely rewarding tax credit of $2,000 per dwelling unit. This is a valuable bonus for property owners that achieve a lower carbon footprint. Energy efficiency is also a feature that potential tenants highly value when looking for a home.

Qualified applicants must file for 45L in the same tax year in which the featured properties were completed and leased. In addition, taxpayers can only go back three tax years to claim the lucrative credit, so it’s important to complete the process in a timely manner.

Leverage Your Energy Efficiency with 179D

New buildings or completed renovations that were performed in an effort to reduce energy may be rewarded with this significant tax provision. Taxpayers can earn up to $1.80 per square foot on each qualifying property, $.60 on each energy saving system. Total energy consumption must be reduced by 50% in order to qualify for 179D. Once the project is complete, a qualified professional must also certify it as energy-efficient. Once this process is complete, a detailed report is modeled, analyzed and transferred to a digital version in compliance with the IRS’s requirements.

Take the Next Step in Savings

Our team is composed of tax experts and engineers with over 20 years of experience in specialty tax areas. Contact National Tax Group at (561) 257-3436 for a free assessment and start the process of earning your lucrative tax savings.

Is Your Business Eligible for Maryland’s R&D Tax Credits?

Cash in on Maryland’s lucrative government-sponsored research credit – R&D incentivizes businesses to pursue innovation.

The Research and Development tax is a permanent federal program, and many states, including Maryland, have adopted their own statewide incentives, using the nation’s program as a model. Enacted on July 1, 2017, Senate Bill 200 (“S.B. 200”) makes way for even more Maryland businesses to benefit from the lucrative tax credits awarded to companies by the state’s Department of Commerce.

What are the benefits of Maryland’s R&D tax credits?

In Maryland, the total amount of credits any business receives depends on the amount of eligible expenses incurred with a limit of $12 million for all businesses that apply.​ The Basic R&D tax credit provides businesses with 3% of eligible R&D expenses less than or equal to Maryland’s base amount. If the total credits applied for exceeds $4.5 million, the business’s Basic tax credit is prorated. 

Maryland’s Growth R&D tax credit offers companies 10% of eligible R&D expenditures over Maryland’s base amount. If the total credits applied for are over $4.5 million, the business’s Growth R&D tax credit is prorated.

Small businesses are especially rewarded through R&D in the state of Maryland. A small business is defined as a for-profit corporation, LLC, partnership or sole proprietorship whose net profits are less than $5 million for the tax year. This credit is refundable for cash, in an effort to further drive business growth and innovation from smaller companies.

What is the first step to applying?

According to the Maryland state website, applications for the state of Maryland R&D tax credits must be received no later than September 15th of the calendar year following the tax year in which the expenses were incurred. Maryland Commerce will issue a tax credit certificate with the approved credit amount by February 15th. If a business has already filed their taxes for the current tax year, they can apply to amend their taxes for that tax year, as well as the previous seven tax years.

Qualifying expenditures include wage, contractor, and supply expenses related to a taxpayer’s attempts in Maryland to develop or improve the functionality or performance of its products, manufacturing processes, software, or other components.

Maryland states that the first step to determining the business’s R&D tax credits are to collect the gross receipts for the tax year for which you are claiming credits, as well as the preceding four years. Keep in mind that the R&D credits are limited to activities performed within the state only. This process are best tackled with a team of national tax experts who can guide business owners through these steps one by one.

If you think your business qualifies for any Research and Development tax savings, call National Tax Group at (561) 257-3436 to start your free analysis. 

Going Green? Earn Tax Breaks for Saving Energy

Feel even better about reducing your carbon footprint when you take advantage of the significant tax savings found under 179D and 45L.

In addition to being environmentally friendly, energy-saving properties more often attract modern residents for their “green” stamp, and better retain their value over time. There are two specialty tax benefits that reward eligible building contractors, potentially saving them tens of thousands in tax liabilities. 179D is a tax deduction for commercial building owners and primary designers. 45L is a credit for energy-saving properties that stand at three stories or less.

179D: A Deduction Rewarding Energy Efficiency

Your building does not have to be brand new in order to benefit from this tax perk. Both newly constructed and renovated buildings that have installed energy-saving elements qualify under this tax provision. Ideal candidates for the 179D deduction are commercial building owners, architects, design firms, and groups that have government building contracts.

Even if you have just upgraded one element throughout your properties such as lighting, you may still qualify for a portion of the $1.80 per square foot deduction. Moreover, this tax policy was extended through the end of 2020, which opens an opportunity for businesses to retroactively claim 179D for the 2018 & 2019 tax years.

45L: A Tax Credit for Energy Efficient Homes

Eligible building owners, contractors and developers that reduce energy use by at least 50% can claim the 45L tax credit, which awards applicants with $2,000 in tax credits for each dwelling unit. New energy-efficient systems and installations built or significantly reconstructed from August 5, 2005 to December 31, 2020 are applicable. The credit can be especially valuable for owners of apartment or condominium buildings because each unit is eligible for its own credit.

Furthermore, the 45L tax credit can be retroactively claimed for residential and apartment buildings in the last three years, and any unused credit can be claimed for up to 20 years in the future. Ideal candidates are residential building developers with multiple properties, but any developer, builder, or homeowner may qualify.

What is the first step to claiming my deductions?

A site visit by an independent, qualified party is required to verify the installation of the property’s energy-efficient elements. Certifications must be obtained to verify that the home meets specific government-issued requirements. To get started on your claims, work with a trust tax team who can walk you through every step of the process. To find out if your properties pre-qualify, contact National Tax Group at (561) 257-3436 to claim your free tax analysis report.