For 35 years, the Credit for Increasing Research Activities has provided tax incentives to companies spending capital to develop or improve their product offerings.  While the credit has provided billions of dollars in tax savings each year, early-stage companies have often been left out.  This is because the credit didn’t provide immediate savings for companies with no tax liability (as is common with early-stage companies) and it could not be used to offset the Alternative Minimum Tax.

These problems were largely resolved as part of last December’s Protecting Americans from Tax Hikes Act.  Under the new law, qualified small businesses can use the credits to offset a portion of their payroll taxes, which allows pre-profitable employers to benefit.  The new law also allows the credit to offset AMT for certain small businesses.

If you haven’t looked into this credit in the past, now is the time to schedule sit down with a qualified CPA to take a second look.  I would be happy to meet with you to review options. 

Mark E. Lumsden, CPA
303.440.0399
mlumsden@acmllp.com
www.acmllp.com