Now that Congress has finally extended the research and experimentation credit retroactive to January 1, 2014 and through December 31, 2014, your business may be an ideal candidate to earn credits for unfunded research during the past three years (yes, you can go back retroactively to claim past credits through amended tax returns).
For companies with independent research and development, or other research that is not funded by another entity (government or commercial), research credits may be available. Unused research credits may be carried back one year and forward for twenty years. For S-Corporations, LLC’s, and sole proprietorships are pass-through entities where there may be a requirement to claim on an amended business and individual return. Research credits amount to 20% of qualified research expenditures in excess of a threshold amount based on revenue and expenditure levels depending on the method of computing the credit used. Credits are dollar-for-dollar reductions to tax due and are available on the federal level, in addition to many states.
For additional information, please visit us at www.mokercpa.com.