On December 18th of 2015, President Obama signed into law the Protecting Americans from Tax Hikes Act of 2015 (hereinafter the “PATH Act”) that significantly enhanced the Federal-Level R&D Tax Credit Program (hereinafter “RTC Program”) under I.R.C. § 41 on a myriad of levels for both eligible “Small Businesses” and eligible “Start-Up Companies”. More specifically, the enhanced RTC Program has been considerably restructured for these aforementioned companies to now:
- Allow eligible “Small Businesses” (i.e., $50 million or less in gross receipts) to claim the credit against the Alternative Minimum Tax (hereinafter “AMT”) for tax years beginning after December 31, 2015; and
- Allow eligible “Start-Up Companies” (i.e., those with less than $5 million in gross receipts and earning revenue for less than 5 years) to claim up to $250,000 of the credit against the company’s federal payroll tax for tax years beginning after December 31, 2015.
These aforesaid statutory changes to the RTC Program truly represent a paradigm shift for eligible Small Businesses and Start-Up Companies alike to not only claim the R&D Tax Credit but most importantly to be able to actually utilize the tax benefits associated with this advantageous program.
Please contact me to discuss the scope and application of the newly enhanced RTC Program and how to properly identify, gather and document a sustainable R&D Tax Credit claim for your eligible Small Business and / or Start-Up Company.
A copy of the PATH Act can be downloaded for your reference at: http://waysandmeans.house.gov/wp-content/uploads/2015/12/PATH_Act_xml.pdf
For complete legislative updates from the Hill please follow Peter J. Scalise at http://www.ishade.com/member/14683/profile
iShade Tax Faculty Biography:
Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.
Peter is a highly acclaimed thought leader in the fields of accounting and taxation with deep subject matter expertise in connection to designing, implementing and defending sustainable methodologies for specialty tax incentives including, but not limited to, research tax incentives; orphan drug credits; therapeutic discovery credits; movie production tax incentives; accounting methods and periods; energy tax incentives in connection to green building envelope efficiency and benchmarking, solar energy, bio energies, fuel cells, wind turbines, micro turbines, and geothermal systems; and comprehensive fixed asset analysis incorporating principles of construction tax planning, cost segregation analysis and the final treasury regulations governing tangible property.
Peter is a renowned keynote speaker and an extensively published author on specialty tax incentives, tax controversy matters, and legislative updates from Capitol Hill for NAREIT, AGRION, USGBC, AICPA, ASTP, NATP, ABA, AIA, and TEI. Peter serves as a member of the Tax Faculty for CPAacademy, iShade and TaxConnections University (“TCU”). Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable.