http://www.cbiz.com/page.asp?pid=8761

Laura Kushner, Director of Marketing

The United States was one of the first countries to enact a federal tax credit for R&D in 1981, and throughout that decade we had the most generous R&D incentive in the world. However, other countries soon realized the benefit of the R&D credit and adopted not only similar but often more lucrative credits.

By 1996, the U.S. ranked only 7^th in R&D tax generosity out of the countries that had an R&D credit, and by 2004 we had slipped to 17^th place. The key reason — every other country with an R&D tax credit has increased the generosity of those credits. Not only has the U.S. not increased the credit, but to date Congress has not yet extended the credit for 2010. The result – by 2009 the U.S. ranked dead last — leaving the number one position to France.

However, if Congress were to enhance the R&D tax credit and make it permanent as other countries have done instead of simply extending it each year, the result would be an immediate and positive impact on U.S. innovation and job creation.

For example, a study by the Information Technology and Innovation Foundation think tank suggests that raising the Alternative Simplified (ASC) R&D tax credit rate from 14 to 20 percent would create 162,000 jobs in the short-term and an unspecified number of additional jobs in the longer-term. ITIF also estimates that raising the ASC would increase the annual GDP by $90 billion, the number of patents issued by 3,850 and federal tax revenues by $17 billion.

Raising the ASC to 20 percent would bump the U.S. R&D tax generosity rank to number 10. However, we would need to increase the ASC to 31 percent to move to 5^th place and to a whopping 47 percent in order to reclaim the number one spot with the most generous R&D credit of the 21 countries that currently offer one.

Fortunately for American businesses, all but about 12 states offer a state R&D credit. Some of these state credits are more lucrative than the federal credit, and some are even fully refundable.

For example, New York has a refundable credit, specifically for companies with revenues under $10 million, that averages between 9-18%. Starting in tax year 2010, the Minnesota state credit will be expanded and made refundable. Louisiana has one of the most lucrative credits of all the states. Depending on the size of the company, the credit can be from 8 to 40 percent, and it is also refundable.

Companies located in states that offer a state R&D credit can realize significant dollars in tax credits, especially when combined with the federal credit. These dollars can be reinvested to fund additional R&D which, in turn, will boost both innovation and job creation in the U.S.

The bill expanded Minnesota’s R&D tax credit, making it more attractive for small to large-sized companies that conduct R&D activities in the state.

Major changes to the MN R&D Credit:

1. Effective for taxable years beginning after December 31, 2009, partners in a partnership and shareholders in an S corporation may now take the R&D credit. Previously, only C corporations could take the credit.
2. The tax credit increased and now equals 10 percent of the first $2 million of excess qualified research expenses for the taxable year over the base amount. For excess expenses over $2 million, the credit equals 2.5 percent.
3. The credit for taxable years beginning after December 31, 2009, is now refundable.

ACTION ITEMS

All pass-through entities should seek to take advantage of the Minnesota R&D in 2010.

In addition, all companies that have had losses for several years, and have never taken the state credit, should take advantage of the credit in 2010 to obtain a refund.

The bill would merge two existing options, sunsetting the traditional research and development credit after 2010 and permanently boosting the “alternative simplified credit” from 14 percent to 20 percent. The aim is to provide a more robust and flexible credit for newer and start-up firms, particularly in the technology sector. At the same time, it would end the stop-start nature of the existing credit — which has been extended 13 times — providing certainty for companies while letting older, established firms gradually adjust to the alternative credit.

The traditional credit applies to qualified research expenses above a certain amount. The amount depends on whether the company is considered established — with gross receipts and research expenses in three or more tax years from 1984 to 1988 — or a start-up firm, which had fewer than three tax years in that period. But the base amount must exceed 50 percent of a firm’s qualified research expenses in a tax year.

The alternative credit was added to the tax code in 2006, allowing firms to claim a credit for 12 percent of qualified research expenses above 50 percent of its average over the previous three tax years. The credit was boosted to 14 percent for 2009 as part of the financial industry rescue package in the fall. Hatch touted the simplified credit as a “more direct incentive to innovation-oriented companies” in the high-tech sector, such as biotech and software.

A similar bill was introduced earlier this year in the House, with more than half of the House tax-writing panel’s members co-sponsoring the bill.

Earlier this year, a coalition of firms, including Microsoft, Boeing, Dow Chemical and CA wrote in support for the bill. Some companies prefer the traditional credit, however, more and more have migrated to the alternate credit and those that have not made the switch will have time to adjust and benefit from the boost to 20 percent.

Currently companies can choose between the two methods and some firms that benefited from the traditional structure may lose out under the plan. The Senate proposal would allow companies to use the traditional credit for 2009 and 2010. Afterward, it would expire.

The traditional credit is generally based on the increase in research spending at a company in relation to a base period of 1984 through 1988. The alternative simplified credit rewards companies for increasing research spending above a base level determined by spending in the previous taxable years. The new proposal would increase the rate on the alternative credit from 14 percent to 20 percent.

The Obama administration has proposed making the credit permanent, but in its current form rather than merging the components, at an estimated $74.5 billion cost. The White House would pay for the extension through a series of tax changes targeting multinational firms’ overseas profits, which the business community has launched a massive lobbying effort to kill.

If your company is looking for a smart way to increase cash flow, you owe it to yourself to learn more about the R&D Tax Credit.

For a FREE benefit analysis or to have a deeper discussion about increasing your company’s cash flow contact:

SourceCorp Professional Services

Tax law changes during 2007 and 2008 have increased the complexity of preparing tax returns, creating both challenges and opportunities. President George W. Bush signed into law on Oct. 3, 2008, a package of three bills: Emergency Economic Stabilization Act of 2008, the Energy Improvement and Extension Act of 2008, and the Tax Extenders and Alternative Minimum Tax Relief Act of 2008.

Click HERE to discover 5 tax-planning ideas that can help minimize your 2008 and 2009 tax bills.

Don’t Delay:
Take time now, before year-end, to review your 2008 tax situation and consider tax-saving strategies that you still have time to implement. Don’t wait until it’s too late to reduce your 2008 tax bill. You can reach the tax professionals at SourceCorp at: www.SourceCorpTax.com.

Pay Less Tax. Save More Money.™

Since 1983, SourceCorp has provided IRS-approved tax strategies and services to clients resulting in maximized tax deductions, increased cash flow, minimized tax payments and increased ROI. For more than 25 years, we have worked closely with CPAs, manufacturers, wholesalers, distributors, building owners, architects, engineers and auto dealerships to help them pay less tax and save more money. As a result, funds are available for reinvestment or to meet other current needs. Owned by Apollo Management, Inc., a New York-based private equity firm, SourceCorp is the nation’s leading provider of specialized tax services including LIFO Accounting, R&D Tax Credit Studies, Cost Segregation Studies, and Energy Efficient ‘Green’ Building Tax Deduction Services.

The bill included a two-year extension of the R&D tax credit, which expired at the end of 2007. The tax credit covers up to 20 percent of qualified R&D spending.

Current legislation has revolutionized Research & Development credits allowing more businesses and their activities opportunity to take advantage of these benefits than ever before.

What is the Research & Development Credit?
The Research & Development Credit is a federal tax benefit providing incentives to companies to invest in activities for the development of new and improved products, software, and manufacturing processes thereby reducing their tax liability and increasing funds available for future innovation.

Primarily a labor-based incentive, the R&D Credit applies to activities undertaken to develop new and improved products, processes, software and formulas such as:

• Developing new products
• Improving existing products
• Developing new materials
• Building and testing prototypes and models
• Developing new or improved software applications
• Testing new concepts
• Developing or improving production or manufacturing processes
• Developing, implementing or upgrading systems
• Experimentation
• Paying outside consultants/contractors to do any of these activities

Who Qualifies?
Any company involved in the development, improvement or refinement of products, processes and formulas may qualify. If your company has been engaged in these types of activities for the last several years, you may be eligible to retroactively claim the R&D Tax Credit for federal and state income tax purposes, obtain significant cash refunds, and establish a methodology to continue claiming these credits in future years.

• Aerospace
• Agriculture
• Automotive
• Chemicals
• Electronics
• Engineering
• Forestry
• General Manufacturing
• Hardware Development
• Pharmaceuticals
• Product assembly
• Semiconductors
• Software Development
• Telecommunications
• And others

Benefits:
• Immediate source of cash (via tax refunds) by capturing and recovering tax credits for prior year(s)
• Reduction in current-year tax
• Source of permanent tax savings and financial statement benefits
• Increase in market value, cash flow, and company ROI
• Source of potential benefits for future R&D activities
• Carry-forward of unutilized credits for 20 years

Are You Missing The Opportunity For Substantial R&D Benefits?
The Research & Development (R&D) tax credit is one of the most significant domestic tax credits available – a substantial tool for maximizing your company’s value. Because the R&D Tax Credit is a resource-intensive and highly specialized process, we have discovered that many companies simply cannot develop and substantiate the necessary R&D documentation. Additionally, another challenge is capturing all R&D opportunities that currently exist. The SourceCorp R&D Tax Credit Team can help improve your benefits and limit your exposure.

As the nation’s most respected, trusted, and reliable provider of specialized tax services, SourceCorp offers a turnkey, comprehensive R&D Tax Credit service that identifies and recovers Research & Development (R&D) tax credits available for your business so that you pay less tax and save more money.

Free Preliminary Analysis

For more than 25 years, SourceCorp has worked closely with CPA firms, manufacturers, wholesalers, building owners, architects, and auto dealerships to realize their vision to increase cash flow, reduce taxes, and build lasting value, while striving to maintain the highest level of customer service, communication and overall satisfaction. SourceCorp is owned by Apollo Management, Inc., a private equity firm based in New York.

Research and Development Tax Credit
The R&D tax credit was extended for two years through December 31, 2009. The federal R&D Credit continues to provide companies an opportunity to claim an income tax credit for activities centered on the development or improvement of products, processes, software, techniques or formulas. This credit generates significant tax savings for US companies in the manufacturing, technology, software, engineering, and aerospace/defense industries.

If you are involved in developing new products/processes, improving existing products, creating more reliable products, developing prototypes, design tools/jigs/molds/dies, apply for patents, testing new concepts, investment in manufacturing process activity, developing new technology or employ outside consultants and/or contractors to do any of these activities, you may qualify for the R&D Tax Credit.

Click here for a no-cost, no-obligation R&D Tax Credit analysis

About SourceCorp Professional Services
Celebrating our 25th year in business, SourceCorp Professional Services is the leading provider of R&D Tax Credit Studies, Energy Efficient Commercial Building Tax Deductions, Cost Segregation Studies, and LIFO Accounting in the U.S. SourceCorp serves many of the nation’s most prominent CPA firms, Associations, and Fortune 1000 companies.

Energy Efficient Commercial Building Tax Deduction

Extended through December 31, 2013. Section 179D(a) is a deduction for commercial building owners whose buildings meet certain energy standards. The deduction is as much as $1.80 per square foot for buildings that achieve a 50 percent energy savings target. Before claiming the deduction, the owner must obtain written certification from a professional engineer not related to the company using approved software that the required energy savings will be achieved. SourceCorp is the only company in the U.S. specializing in helping green building businesses reduce tax liabilities and increase cash flow.

Click here for a no-cost, no-obligation Green Building Tax Deduction analysis

Research and Development Tax Credit

The R&D tax credit was extended for two years through December 31, 2009. If you are involved in developing new products/processes, improving existing products, creating more reliable products, developing prototypes, design tools/jigs/molds/dies, apply for patents, testing new concepts, investment in manufacturing process activity, developing new technology or employ outside consultants and/or contractors to do any of these activities, you may qualify for the R&D Tax Credit.

Click here for a no-cost, no-obligation R&D Tax Credit analysis

About SourceCorp Professional Services
Celebrating our 25th year in business, SourceCorp Professional Services is the leading provider of R&D Tax Credit Studies, Energy Efficient Commercial Building Tax Deductions, Cost Segregation Studies, and LIFO Accounting in the U.S. SourceCorp serves many of the nation’s most prominent CPA firms, Associations, and Fortune 1000 companies. For a FREE analysis to see what your benefit would be: SourceCorp

Some senators predicted that the House will approve the bill easily on Friday after the political kickstart from the upper body.

Tax breaks
The added tax breaks include a one-year fix of the alternative minimum tax to shield millions of upper-middle-income taxpayers from a big tax increase; tax breaks for wind, solar and other alternative energy projects; and an extension of the research and development tax credit for businesses. The energy and research tax breaks have been pushed heavily by Silicon Valley companies that see alternative energy as the next technological frontier.

Free R&D Tax Credit Preliminary Analysis: Now Is The Time To Schedule Your Study

SourceCorp offers a turnkey, comprehensive R&D Tax Credit service that identifies and recovers Research & Development (R&D) tax credits available for your business.

Current legislation has revolutionized Research & Development credits allowing more businesses and their activities opportunity to take advantage of these benefits than ever before.

What is the Research & Development Credit?
The Research & Development Credit is a federal tax benefit providing incentives to companies to invest in activities for the development of new and improved products, software, and manufacturing processes thereby reducing their tax liability and increasing funds available for future innovation.

Primarily a labor-based incentive, the R&D Credit applies to activities undertaken to develop new and improved products, processes, software and formulas such as:

• Developing new products
• Improving existing products
• Developing new materials
• Building and testing prototypes and models
• Developing new or improved software applications
• Testing new concepts
• Developing or improving production or manufacturing processes
• Developing, implementing or upgrading systems
• Experimentation
• Paying outside consultants/contractors to do any of these activities

Who Qualifies?
Any company involved in the development, improvement or refinement of products, processes and formulas may qualify. If your company has been engaged in these types of activities for the last several years, you may be eligible to retroactively claim the R&D Tax Credit for federal and state income tax purposes, obtain significant cash refunds, and establish a methodology to continue claiming these credits in future years.

• Aerospace
• Agriculture
• Automotive
• Chemicals
• Electronics
• Engineering
• Forestry
• General Manufacturing
• Hardware Development
• Pharmaceuticals
• Semiconductors
• Software Development
• Telecommunications
• And others

Benefits:
• Immediate source of cash (via tax refunds) by capturing and recovering tax credits for prior year(s)
• Reduction in current-year tax
• Source of permanent tax savings and financial statement benefits
• Increase in market value, cash flow, and company ROI
• Source of potential benefits for future R&D activities
• Carry-forward of unutilized credits for 20 years

Don’t Miss The Opportunity For Substantial R&D Benefits:
The Research & Development (R&D) tax credit is one of the most significant domestic tax credits available – a substantial tool for maximizing your company’s value. Because the R&D Tax Credit is a resource-intensive and highly specialized process, we have discovered that many companies simply cannot develop and substantiate the necessary R&D documentation. Additionally, another challenge is capturing all R&D opportunities that currently exist. The SourceCorp R&D Tax Credit Team can help improve your benefits and limit your exposure.

Free Preliminary Analysis
A free preliminary analysis can give you an idea of how the Research & Development Credit can benefit your company. Contact us today to apply for free analysis.

10 Reasons Why Businesses Choose SourceCorp:
1. Trusted, experienced, reliable and financially stable:
Founded in 1983, and owned by Apollo Management, Inc., a private equity firm based in New York, we bring experience, reliability and stability as compared to many newcomers to the industry that have little to no experience nor can provide long-term presence in the event of an IRS audit.

2. We go beyond SOX compliance:
We have successfully implemented process controls and data security measures that meet or exceed the following standards: Sarbanes-Oxley Act of 2002, Gramm-Leach-Bliley Act of 1999 (GLBA), and the Health Insurance Portability and Accountability Act of 1996 (HIPPA). Additionally, we carry $2M errors and omissions liability insurance with best-rated insurance firms.

3. We build lasting relationships:
We are a tax benefit service company specializing in tax areas requiring significant accounting, financial, business, manufacturing, engineering and technology expertise. We are not a CPA firm, but because we have many CPAs on staff and in executive management, we understand the unique CPA/client relationship and work with your accounting firm or in-house accounting manager. As such, we build long-term relationships with our clients providing significant and leveraged experience and synergies. We bring value by helping you become more efficient and profitable.

4. We become your one-source resource:
As your single-source specialized tax benefit provider, we can save you time and money. We deliver all the different elements of a specialized tax benefit service – a turnkey approach – that is not only more convenient, but is the most effective method to streamline the entire process.

5. We will find the maximized benefit:
We ensure the maximum benefit possible based on our 25-year experience, technical expertise, and understanding of your industry.

6. Complimentary review:
We will honestly tell you in advance whether or not the tax benefit is warranted before you engage our services. In other words, you get to see up front whether or not to pursue the benefit. As a result, our clients trust our counsel and have partnered with us for decades.

7. Complimentary audit assurance and support – we take responsibility:
We have successfully defended our studies during IRS examinations and have withstood the scrutiny of IRS audits as well as hundreds of CPA reviews. We don’t charge for Audit Insurance because we stand behind our work and we believe it’s the right thing to do. With other businesses here today and gone tomorrow, it makes sense to partner with a firm with a long history, financial strength, and one recognized as the industry leader. We provide up to 40 complimentary IRS audit support hours with every study we perform.

8. We are responsive:
We believe that our client relationships are a non-renewable resource. When you contact us, you can expect to receive a reply in 4 hours or less. Moreover, on average, our studies can be completed from initial analysis to final documentation from 2-6 weeks. With more than 70 full-time staff members including CPAs, engineers, business professionals, marketing, tax specialists and with offices located throughout the US, we don’t outsource our work, so you’ll receive an answer from the people who are knowledgeable, experienced and passionate about your business in short order.

10. We guarantee our work:
If you’re not 100% satisfied, we will make it right.

About Us:
SourceCorp is the nation’s leading consulting firm specializing in LIFO Accounting, R&D Tax Credit Studies, Cost Segregation Studies, and Green Building Tax Deductions. Our strength is in understanding the complexities of taxation and construction engineering – we help clients pay less tax and save more money.

Since 1983, SourceCorp has worked closely with CPA firms, manufacturers, wholesalers, building owners, architects, and auto dealerships to realize their vision to increase cash flow, reduce taxes, and build lasting value, while striving to maintain the highest level of customer service, communication and overall satisfaction. SourceCorp is owned by Apollo Management, Inc., a private equity firm based in New York.

Free Preliminary Analysis

Click here for your no-cost, no-obligation R&D Tax Credit analysis

SourceCorp offers a turnkey, comprehensive R&D Tax Credit service that identifies and recovers Research & Development (R&D) tax credits available for your business so that you pay less tax and save more money.

Current legislation has revolutionized Research & Development credits allowing more businesses and their activities opportunity to take advantage of these benefits than ever before.

What is the Research & Development Credit?
The Research & Development Credit is a federal tax benefit providing incentives to companies to invest in activities for the development of new and improved products, software, and manufacturing processes thereby reducing their tax liability and increasing funds available for future innovation.

Primarily a labor-based incentive, the R&D Credit applies to activities undertaken to develop new and improved products, processes, software and formulas such as:

• Developing new products
• Improving existing products
• Developing new materials
• Building and testing prototypes and models
• Developing new or improved software applications
• Testing new concepts
• Developing or improving production or manufacturing processes
• Developing, implementing or upgrading systems
• Experimentation
• Paying outside consultants/contractors to do any of these activities

Who Qualifies?
Any company involved in the development, improvement or refinement of products, processes and formulas may qualify. If your company has been engaged in these types of activities for the last several years, you may be eligible to retroactively claim the R&D Tax Credit for federal and state income tax purposes, obtain significant cash refunds, and establish a methodology to continue claiming these credits in future years.

• Aerospace
• Agriculture
• Automotive
• Chemicals
• Electronics
• Engineering
• Forestry
• General Manufacturing
• Hardware Development
• Pharmaceuticals
• Semiconductors
• Software Development
• Telecommunications
• And others

Benefits:
• Immediate source of cash (via tax refunds) by capturing and recovering tax credits for prior year(s)
• Reduction in current-year tax
• Source of permanent tax savings and financial statement benefits
• Increase in market value, cash flow, and company ROI
• Source of potential benefits for future R&D activities
• Carry-forward of unutilized credits for 20 years

Don’t Miss Your Opportunity For Substantial R&D Benefits:
The Research & Development (R&D) tax credit is one of the most significant domestic tax credits available – a substantial tool for maximizing your company’s value. Because the R&D Tax Credit is a resource-intensive and highly specialized process, we have discovered that many companies simply cannot develop and substantiate the necessary R&D documentation. Additionally, another challenge is capturing all R&D opportunities that currently exist. The SourceCorp R&D Tax Credit Team can help improve your benefits and limit your exposure.

Click here for your no-cost, no-obligation R&D Tax Credit analysis

About SourceCorp:
SourceCorp is the nation’s leading consulting firm specializing in LIFO Accounting, R&D Tax Credit Studies, Cost Segregation Studies, and Green Building Tax Deductions. Our strength is in understanding the complexities of taxation and construction engineering – we help clients pay less tax and save more money.

Since 1983, SourceCorp has worked closely with CPA firms, manufacturers, wholesalers, building owners, architects, and auto dealerships to realize their vision to increase cash flow, reduce taxes, and build lasting value, while striving to maintain the highest level of customer service, communication and overall satisfaction. SourceCorp is owned by Apollo Management, Inc., a private equity firm based in New York. For more information, please call 817.732.5494 or visit SourceCorp Professional Services.