News: R&D

R&D Credit – New IRS Safe Harbor for R&D Costs

On September 11, 2017, the commissioner of the Large Business & International (LB&I) Division of the IRS issued new guidance for taxpayers using ASC 730 to expense research and development costs on their financial statements. This directive (LB&I-04-0917-005) provides a …

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R&D Tax Credit Payroll Tax Offset – Starting in 2017!

The new Path Act which was passed in Congress December 2015 kicks in effective for tax year 2016.  One significant new provision is that start up companies can use up to $250,000 in R&D credits against their 2017 quarterly payoll …

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IRS Issues Final Regulations on Internal Use Software – R&D Tax Credits

The IRS has issued final regulations largely adopting provisions in the January 2015 proposed regs on internal use software. These final R&D regulations on internal use software are effective prospectively for tax years ending after October 4, 2016. The new …

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Year End Guidance – R&D Tax Credit Software Documentation

The general rule for R&D tax credit documentation is found under IRC 6001 – a taxpayer must retain documentation in usable form to substantiate (in this case the R&D tax credit), and IRS typically wants to see evidence of the …

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New Long Awaited R&D Credit Regs on Internal Use Software

These important new proposed regulations issued last week on the R&D tax credit affect what is known as internal use software or IUS which has been debated since Congress distinguished internal use software from other software back in 1986. Over …

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R&D Tax Credit – Tax Extenders Bill 2014 – Vote on Thursday

Congress is expecting a vote on HR 5771, on Thursday which would extend the R&D tax credit and energy efficient tax credit under Section 45L for one year – meaning both tax credits would be retroactively enacted for 2014 (but …

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Texas R&D Tax Credit

The state of Texas has enacted a Research and Development Tax Credit. The law allows taxpayers to take a franchise tax credit for R&D expenditures or a sales and use tax exemption for the purchase or lease of depreciable tangible …

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New Section 174 R&D Regulations – R&D Expenditures

The IRS recently published new proposed regulations for research & development (R&D) costs under Section 174 that amend some of the rules around what costs qualify under Section 174 for an R&D deduction.  In general, these amendments attempt to quell …

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North Carolina R&D Credit Overview – Extended Through 2015

The Technology Development Tax Credit in North Carolina has been renamed the Research & Development (R&D) tax credit as of mid-2013 but the same rules apply and this credit is now extended through 2015. Taxpayers may claim eligible R&D expenses …

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Union Carbide R&D Tax Credit Case will not be heard by the Supreme Court

On March 18th, 2013, the Supreme Court declined to review a Second Circuit decision, affirming the Tax Court decision, finding that the taxpayer was entitled to a R&D tax credit for only additional supplies that were used to perform research. …

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