On Tuesday, Congress passed a two year R&D tax credit extension, retroactive for 2012 and through December 31, 2013 as part of the fiscal cliff deal. The R&D credit had little substantive changes, for example, no increase in the alternative simplified credit (ASC) rate, but did include a new means of pro-rating how to account for acquisitions and dispositions in the R&D credit calculation for partial year acquisitions and dispositions of a trade or business.
Although the R&D tax credit is still not a permanent part of the tax code, Congress at least avoided a gap period and with the January timing, will allow companies to review R&D tax benefits for year end provisions for calendar year taxpayers.
If you have any questions about the R&D credit extension bill, feel free to contact the Warner Robinson team.