Every year, businesses can apply for a variety of Research and Development (R&D) tax credits, offered at both the state and federal level. R&D tax credits were first implemented in 1981, with the goal of encouraging businesses to become more creative and competitive as they utilize their own research and development with their specific products. In the past forty years, many businesses have their own R&D departments already, but not many are taking full advantage of the tax credits offered. The New Jersey Manufacturing Extension Program (NJMEP) can help manufacturers with this!
A manufacturing business can work with NJMEP to determine all the tax credits they could potentially qualify for, as well as any credits that might interest them in the future. Your company may qualify for extensive credits if your research expenditures meet the Federal requirements. These R&D credits may be applied to taxes due or to future tax liability. They may be retroactive for three years in addition to the current year and carry forward for twenty years.
In addition to the free consultations NJMEP can provide for your business, they also offer a complimentary Research Tax Credit Estimator. A manufacturer can download this Excel program, and after plugging in various data and information about their business, will have a rough estimate of their company’s qualified tax credits.
In the past, this estimator has saved a variety of NJ manufacturers thousands of dollars in saved taxes—for example, a manufacturer who utilized injection molders saved up to $385,000 in tax credits after working with NJMEP. That is an amazing accomplishment, and something that almost every injection molder manufacturer can utilize.
For more information about how to qualify for R&D tax credits, contact NJMEP with any questions or comments, and download the R&D Tax Credit Estimator below!