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A federal credit is permitted under the Internal Revenue Code for incremental qualified research expenditures paid or incurred through June 30, 2004 (efforts to retroactively reinstate the credit are anticipated). Under the federal rules the taxpayer may either use the regular or the alternate incremental computation, which would require that the business deduction for the expenditures be reduced. Alternatively, the taxpayer may elect to take a current deduction, or capitalize and amortize, certain qualified research expenditures.

In addition, many states offer tax credits for companies engaging in research and development activities within their states. Often, the company does not even have to be claiming the federal R & E (Research & Experimentation) tax credit in order to claim a credit in the state(s) where those activities are taking place. Typically, the credits are either based on the federal tax credit calculation, or a percentage of the research and development expenditures incurred in the state. The potential lapse of the federal credit provisions may not affect the availability of certain state tax credits.

Incentis Group professionals structure incentives packages ensuring all possible incentive opportunities are considered and that creative ideas are presented directly to federal, state, and local economic development officials. Our professionals have secured hundreds of millions of dollars of benefits for companies, reducing start-up, expansion, consolidation, and on-going operating costs.

For more information on R & D Tax Credit opportunities please use the request form.