R&D Tax Credits: Where’s The Enthusiasm?
When we mention the subject of training grants to New Jersey manufacturers, we often receive an enthusiastic response. Whether it’s through e-mails, phone calls or one-on-one meetings, manufacturers typically jump at the chance for grants. This is a fair reaction – training grants provide great opportunities for NJ manufacturers.
When we mention the subject of R&D tax credits to many manufacturers here in New Jersey, we often get a less enthusiastic response…or even an apathetic reaction.
Let me be clear: training grants and R&D tax credits are two very different things. But it makes me wonder… where’s the enthusiasm for R&D tax credits? If I were an NJ manufacturer, I would explore any possible opportunity to get money back for my business.
Discussing the topic with companies in the field, I often hear some misconceptions about obtaining R&D tax credits, which could explain the enthusiasm gap. So let’s clarify some things:
Misconception #1: “What I’m doing doesn’t qualify”
If your company is developing new products or improving procedures or processes, there’s a good chance that your efforts qualify for R&D. Making a prototype? R&D. Adding a new part to improve a product?
R&D credits can also be applied to taxes due or to future liability. In addition to the current year, they also may be retroactive for three years and can carry forward for twenty!
Misconception #2: “It’s not worth the process – I won’t get a lot of money back”
It doesn’t matter if you’re a small, medium or large manufacturer. There are a lot of potential earnings out there. Some recent successes include:
- $385,000 Tax Credit: Injection Molder
- $120,000 Tax Credit: Hair Care Products Manufacturer
- $90,000 Tax Credit: Rubber Manufacturer
- $50,000: Medical Device Manufacturer
No matter your company’s size, receiving thousands of dollars in money back is a huge bonus in today’s competitive climate.
Misconception #3: “My accountant is taking care of it”
Securing R&D tax credits in the manufacturing industry requires a specific understanding of regulations and the submission process. It’s well worth the effort if you obtain the maximum amount allowed by law. It’s important to work with a partnerwho’s experienced with identifying, quantifying and qualifying your expenses.
The bottom line: it doesn’t hurt to find out if you have the chance to qualify. By making a quick phone call to NJMEP, we can give you a free evaluation to see if your efforts are qualifying for R&D tax credits.
For more information, contact Joe Martas at 973-998-9801 or firstname.lastname@example.org.
Image Credit: Management Research and Development.