Many things have changed since my March 9th appearance on the PICPA CPA Conversations Podcast, but a few things remain the same…..
A few weeks ago, I was interviewed by James DeLuccia, Manager, Learning Content at the Pennsylvania Institute of Certified Public Accounts (PICPA) for a segment of the CPA Conversations Podcast.
During this 15-minute interview, I shared with him what I thought at the time were valuable insight as to why “now” is such a great time for businesses to look into claiming the R&D tax credit.
You can listen to the segment here: https://www.picpa.org/articles/cpa-conversations/cpa-conversations/2020/03/09/research-and-development-a-valuable-tax-savings-tool-post-tcja
My main point was that many other valuable credits and incentives businesses once relied upon to reduce their tax burdens have been reduced or eliminated through the Tax Cuts and Jobs Act of 2017. This alone makes the R&D tax credit a more desirable tax savings tool for many businesses who never needed to consider it before.
All of this is still true. However, I could never have imagined just a few short days after this podcast went live we would be facing a global pandemic that would rock our families, our businesses and our daily lives to their very core. We have entered uncharted territory here, and it’s now on all of us to work together to get through the weeks and months ahead.
As tax professionals, we know our clients will be looking to us for guidance during this time. Many are going to be forced to make difficult and unforeseen business decisions. Thankfully, the tax filing deadline has just been extended—giving us all some much-needed time to breathe and think.
For many businesses, right now is absolutely not the right time to look into the R&D tax credit as a new opportunity. But for others—especially small businesses who are just trying to hang on—it might also be a lifeline.
If you are working with a company who is developing new or improved products or processes, please remember the R&D tax credit may be able to help them save income tax in 2019 while also generating refund claims for the prior 3 years. This can really help out businesses during cash-strapped times.
Further, many R&D providers today are equipped to conduct their credit studies through remote communications. So as long as your client/s have the ability to provide the necessary financial data and R&D project data remotely, a study would still be technically feasible given the extended filing date and our current virtual work environments.
If you have questions on whether or not your client might benefit from a credit study, please feel free to contact me directly. I will do my very best to provide you with whatever information you need so that you can make a sound decision for the customers you serve.
Stay safe, stay healthy and stay positive,
Michael Krajcer is President of Tax Credits Group. He has specialized in the R&D Tax Credit since he started with the IRS in 1986 and was a Cleveland large case technical specialist on the issue. Subsequent to his government career, he continued as an expert in the credit area in Big-4 accounting, industry, and with his own national practice. Mike has worked with hundreds of companies throughout the United States and has resolved dozens of IRS and state audits of credit claims.