Thermoforming Quarterly: R&D Tax Credits for Thermoformers

by Michael Devereux II, CPA, CMP

Enacted in 1981 by the Economic Recovery Tax Act, the Credit for Increasing Research Activities [also known as the Research & Experimentation (R&E) or Research & Development (R&D) tax credit] rewards companies for the development or improvement of its products, processes, techniques, formulas, inventions, or software applications.

As a temporary provision of the Internal Revenue Code, the R&D tax credit enjoys bi-partisan support and is one of the most lobbied tax provisions of the Internal Revenue Code. The credit has expired over a dozen times and is regularly reinstated on a retro-active basis as part of various “tax extenders” packages 1 .

The R&D tax credit is a dollar-for-dollar credit against the taxpayer’s federal income tax liability. Taxpayers benefit from the deduction in the year the expenditure is paid or incurred (or subsequent amortization expenditure in the event the taxpayer elects to...

Read the full article in Thermoforming Quarterly | Third Quarter 2014

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