New IRS regulations making it easier and more profitable to file for R&D tax credits
Earlier in June, the IRS provided new guidelines that are now allowing companies to use a streamlined method of filing for R&D tax credits. This new method is currently available for amended tax returns in addition to initially filed tax returns. This is excellent news for architects, engineers, and contractors because it accounts for larger projects that include or require a unique design or solution. The new regulations also allow businesses to use their qualified expense results rather than receipts to calculate their minimum spend amount before they can take advantage of the credit.
These new regulations allow for an increase in cash flow and fewer headaches during the process of filing for your R&D tax credit. This means that more businesses than ever will be able to take advantage of the credit due to the fact that they no longer need to provide those gross receipts. In the past, for architects, engineers, and contractors, this was a significant hindrance that kept them from being able to file correctly or efficiently.
Do I Qualify?
While technically any business that participates in research and development activities, qualifies. However, engineering and architecture firms have the advantage with these new policies because many of their qualifiers are found in day-to-day business tasks that are now easy to write off. Contractors and designers who require unique engineering in the realm of electrical, mechanical, HVAC, environmental, roadway, and specialty work also qualify.
The typical activities that these businesses can claim are the experimentation and/or analysis of new methods, formulas, and techniques in their line of work. This can include but is not limited to: building information modeling (BIM) and 2D and 3D modeling to general engineering. Or any activity that has a goal of investing or improving upon a current method, formula, and technique.
You Can Get Just How Much?
Before the regulation change, many businesses would need to go through hours of research and paperwork to claim the credits they were eligible for. With the new rules and simplified methods, claiming your credit is easier than ever. Not to mention, there is a statute of limitations on every qualifying job, up to three years. This means if your business missed out in the past, it’s not too late! Your business could be claiming wages, non-property materials, and many more items.
The NTG Difference
National Tax Group is a collective group of tax professionals who have seen it all and have experience in multiple sectors. We save our clients millions each year from missed opportunities. National Tax Group assists companies of all sizes and industries in obtaining R&D credits by providing reliable documentation that will withstand any level of IRS and state authority scrutiny, even under these new rules. Give us a call at (561) 257-3436 to make the most out of your work today.