179D Update: More on the Horizon for Green Act of 2019, More Money, and Flexibility.

US Capitol Building

After weeks of speculation, the details of the new energy efficiency proposal  have been released. This proposal has been a long time coming, and it is believed to have a prospective pass date of December 20, 2019. Not only does this bill seek to renew multiple green energy efficiency tax codes, but it is also giving 179D and 45L a facelift. 

What is now being called the Green Act of 2019 calls for the 179D and 45L incentives to be extended from 2017 to 2024. They are also requesting that the energy efficiency level to qualify for these tax incentives be lowered from 50% down to 30%, which would give many more businesses and home builders the opportunity to take advantage of these going green activities. Furthermore, it has been requested that the current 179D incentive of $1.80 per square foot be increased to a full $3.00 per square foot, which almost doubles its value and appeal. The 45L credit has also been upgraded from $2,000 per unit to $2,500 per unit. 

This is a good day for those hoping to take advantage of these going green initiatives in their 2020 projects. More information on its passing date should be released soon, but National Tax Group is hopeful of the outcome, and we are excited to see this come to fruition. Get your tax information ready because once this has been resolved, National Tax Group is here to help you claim all of the incentives your business or unit qualifies for. 

179D Update: House Returns From Recess to Continue Negotiations

The House has returned from their one-week recess on Tuesday and has been against the wire on the November 21st expiration looming overhead. Despite the Democratic party submitting their proposal a few weeks ago on how to resolve this bill, the House and Senate have not come to an agreement on the spending levels. At this point in time, spending negotiations are being stalled due to the political unrest caused by President Trump’s continued request for increased funding to build a wall at the border. 

The green tax extenders package was already in a fragile state before the trouble that has stirred in the White House in the last few months. However, Democrats are still pushing for the life of some green initiative tax incentives. Also, on November 13, a group of 66 different trade associations that are representing multiple industries cultivated a letter to House and Senate asking them to make a move on the tax extenders package that was proposed. This letter pushes for the renewal of multiple tax provisions – including the 179D. 

National Tax Group will continue to be monitoring the status and updates of these tax provisions. As experts in these specialized areas of the tax code, we are prepared to help all taxpayers obtain their incentives once they can again. Contact one of our team members to learn about the expired tax provisions and the benefits they will bring you.


How the Solar Industry is Using R&D Tax Credits to Offset Innovation Costs

Energy power

Get Rewarded for Investing in Innovation for your Solar Company

The solar industry is thriving more and more with each year that passes. A new energy-efficient system is installed approximately every four minutes in the United States, and it is not projected to slow down with the increased popularity of green initiatives and global warming. The solar industry is at a prime time to invest in research and development efforts for their businesses. 

The Research and Development Tax Credit was created in 1981 to encourage innovation amongst businesses. With this incentive, you can offset the costs of your innovation of up to 13% in eligible spending for new and improved products and processes. The best part about this credit is that most of the qualifications are found in day-to-day activities that your business is already doing. 

Qualifying Innovation Fields Include:

  • Solar & Wind Energy Storage
  • Mobile Power
  • Smart Grid
  • Carbon Sequestration & Biofuel
  • Utilizing BIM (Building Information Modeling)
  • Conducting Request for Information Process (RFI’s)

There are many areas within the renewable energy industry that can be improved upon. Solar technology is seeking panels that are more efficient. Creating new and improved systems that can determine how to efficiently store energy generated from solar panels, converting solar energy from AC to DC, and creating new products that can reduce installation costs for homeowners and commercial building owners.    

Eligible costs that can be used to claim this tax credit are items like employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with developing a patent. If your solar company is already doing the work, it makes sense to claim back as much as you can and get rewarded for your improvements. 

If your company has taken steps to create a reliable, renewable, and clean alternative for energy consumption, you are likely able to qualify for R&D credits. Give us a call at (561) 257-3436 and let us perform an assessment on your business to see if you qualify. 

179D Update: Democrats Pushing for Energy Efficiency Bill

Things are looking good for the 179D tax incentive. As we have reported here before, this incentive, along with other energy-efficient tax codes, is included in a bill that is being pushed for. The last we heard, the Democratic Party was preparing a green energy tax bill that should guarantee a renewal or extension of specific tax incentives like the 179D.

Recently, the majority of House Democrats showed up strong, with 166 members signing a letter requesting their leadership to get as many “clean energy tax policies” renewed as possible. This letter also encourages a year-end tax deal, so it looks like we can report good news soon! 

Additionally, this incentive has received major outside endorsements as a group of business and energy efficiency advocates wrote to Congress asking them to pass these clean energy tax policies. They are seeking to increase green policies and efficiency in new and existing home developments. House tax writers from both sides are claiming that Congress can find a solution before the end of the year. 

National Tax Group will continue to be monitoring the status and updates of these tax provisions. As experts in these specialized areas of the tax code, we are prepared to help all taxpayers obtain their incentives once they can again. Contact one of our team members to learn about the expired tax provisions and the benefits they will bring you.

179D Update: Date to Watch

Over the last few months, there has been an expectation of the Democratic Party to be preparing a green energy tax bill that should guarantee a renewal or extension of specific tax incentives likes the 179D. House Democratic tax writers have claimed that the final touches are in the works, and those following along this journey with us should keep a close watch on the date 11/21/19. 

Staff for Senate Finance Chairman Chuck Grassley has been a known advocate for the energy incentives. The Republicans were briefed on Tuesday morning by him with some potential updates. While he has not publicly announced any details due to current negotiations, it should be noted that he has been continuously requesting that the tax incentives that expired at the end of 2017, be renewed or extended. 

Only time will tell, but National Tax Group is continuing to keep a close watch on the incentives. Keep checking back with us for the latest news and updates on the life of these incentives.

Contractors, Engineers, and Architects Rejoice

Close-up of hands of beautiful young designer person wearing suit using drawing compass on drafts. Attractive model working at office desk with blueprints for new project. Interior shot

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.  

179D Update: Verdict Still in Review, but Hopeful.

Verdict Still in Review, but Hopeful. 

Things are brewing in Congress this week as there continue to be discussions surrounding the expired tax credits and incentives. National Tax Group has been keeping a close eye on the progress of these incentives.

It was revealed last month that there would most likely be a tax extender package that should include 45L and 179D. While it still remains unclear whether this tax extender package will come to fruition, it may break the cycle of continuously extending the bills time after time, once they come up for expiration.

While some of the Finance Committee are eager to work up an extender package, it was hinted at in September that the Democrats plan on offering amendments that will be aimed at the 2017 GOP tax overhaul.

It is also up for debate whether an extenders package will be beneficial to the budgeting rules set in place. While some believe the current political stirrings in the white house will affect the outcome of these questions, many remain confident that the tax extender package will happen without getting pushed aside.

National Tax Group is continuing to monitor the progress of these extenders closely, so be sure to check back here for more updates until the Senate reaches a final verdict.

What to Look for in a Cost Segregation Advisor

Because the difference between a good and bad cost segregation advisor could cost you millions

Finding a Cost Segregation Advisor can be challenging, especially if you do not know what to look for. To ensure that no steps are missed and no mistakes made, it is essential to partner with the right advisor who will help you accurately maximize results. National Tax Group knows that we are the best of the best, but don’t take our word for it. If you follow these three general guidelines, you’ll see that we excel in all of these areas.

Experience in Multiple Sectors

When it comes to selecting a Cost Segregation Advisor, it is crucial to ensure that your candidate has experience in multiple sectors in the economy. This goes beyond just expertise in each industry. There are four different sectors in every economy, so it is important that your advisor has a strong understanding and portfolio that showcases management in all of those sectors.

Has a Proven Track Record

Reputable advisors must be able to prove their value through examples of their success. Don’t be afraid to ask for proof of past success stories and references from their clients. Any firm that can’t provide these sources should not be permitted to handle such a large transaction for you.

Utilizes an Engineering-Based Approach

A quality cost segregation advisor will conduct a study that is based on a detailed engineering-based analysis. This analysis should involve a thorough review of relevant information such as cost data, building plans, and lease agreements, as well as an on-site inspection of the property conducted by a qualified professional, preferably an engineer.

When you work with us for your Cost Segregation Study needs, you can rest assured that you are receiving the maximum tax benefits possible. To talk to one of our specialists to find out more, give us a call at (561) 257-3436.

179D Update: Tax Legislative Agenda for the Remainder of 2019

In the last few months, the outcome of expired energy tax provisions has remained unknown. Congress has resumed its session after the August recess and there is still a possibility of tax legislation before the end of the year. There are many items that have been observed by the House of Representatives and the Senate and are likely to be included in a potential tax package. This package could extend the life of many important energy-efficiency bills that support businesses. However, there are also several issues that could occur as well.

The House and Senate have flirted with several proposals given to them to resolve or postpone this process:

  • Once again, temporarily extending the 30-plus bills that are expired or expiring at the end of 2019 through 2020 to be revisited. 
  • Disaster relief
  • Retirement savings 
  • A Tax Cuts and Job Act provisions adjustment that relates to the Kiddie Tax on the children of households that qualify to be Gold Star Families
  • The agenda could be delayed by the impeachment inquiry led by the Democrats 

National Tax Group will continue to be monitoring the status and updates of these tax provisions. As experts in these specialized areas of the tax code, we are prepared to help all taxpayers obtain their incentives once they are able to again. Contact one of our team members to learn about the expired tax provisions and the benefits they will bring you.

Tax Incentive Extenders: Deadline Approaching

Oct 1 is the deadline for the new fiscal year, which means some changes may be coming for tax incentives that are expiring or expired. This year is crucial due to the potential need to raise or suspend the spending caps. These caps affect our national debt to avoid detrimental cuts looming over the defense and nondefense programs. This deadline can give legislators the opening to, once again, add extenders to bills that are vital to keeping the government moving. 

Two of the incentives National Tax Group is paying attention to are the Internal Revenue Code Section 179D and Section 45L. 179D is an incentive for commercial and residential buildings of at least four stories to implement energy-efficient improvements. The second is 45L, a $2,000 credit for qualifying homes of three stories or less that were given based on energy-efficient upgrades. The incentives lapsed at the end of 2017 and have not been extended since their expiration. Both can improve many low-income areas by allowing developers to invest in the communities and gain tax benefits while doing so. 

Amid these unsettled changes, the government could be at risk of shutting down if Congress does not pass legislation to approve new spending, similar to the government shutdown in December 2018. Spending caps are also coming back into the picture on Oct 1, which were adopted as part of the Budget Control Act in 2011. This could mean a $71 billion annual cut on defense spending and a $55 billion reduction in nondefense if Congress does not pass legislation to increase spending caps. 

Additionally, the government reached the height of its debt ceiling of $22 trillion on Mar 1; the Treasury Department has been taking “extraordinary measures” to keep it below the limit. The Treasury has the possibility of running out of financial resources before the August break, so there is an urgency for them to pass a debt limit increase temporarily – possibly until Oct 1.

Legislators have been proactive with trying to receive the extensions they desire. On Jun 20, 110 members of Congress sent over a series of extensions to the House Ways and Means Committee. Section 179D and 45L were included in the 34 extensions up for consideration. 

With 2020 being an election year, this makes it more challenging to pass the legislation due to the deep Democratic and Republican unrest. Bipartisan support is essential to the success of these unsettled matters. While the results of this matter remain unknown, we will be keeping a close watch on its progress. We are hopeful Congress will make a decision that is beneficial to the long-term viability of these energy tax incentives.