Tax I DECEMBER 14, 2017

R&D—Helping Farmers Grow

WHAT IS THE RESEARCH & DEVELOPMENT TAX CREDIT (R&D)

A dollar for dollar reduction in tax. The credit provides up to an 8% return on investment on qualified expenditures plus up to an additional 15% return on investment when coupled with corresponding state R&D credits. The credit applies against either federal income tax or payroll tax liability, so companies without income tax liability may still receive a refund.

QUALIFIED ACTIVITIES

The following are examples of agricultural related activities that may qualify for the credit. Keep in mind, these are only a sample of many other eligible activities. Whenever you invest time and money to improve your business, you may be incurring costs eligible for valuable R&D tax credits and even REFUNDS:

  • Developing new or improved strains of crops
  • Developing waste recovery or waste recycling systems
  • Developing new or improved technologies and processes to advance harvest life cycle
  • Developing new or improved types of fertilizer
  • Designing new or improved irrigation systems
  • Developing new or improved feeds or feeding techniques
  • Designing new or improved types of packaging
  • Developing new or improved feed components or ‘recipes’
  • Developing new or improved techniques and processes to protect crops from disease
  • Experimenting with new and improved manufacturing processes, including the use of structural and thermal analysis or geothermal techniques
  • Developing new or improved breeding techniques
  • Improvements to facilities due to environmental, health, safety or other federal or international regulatory mandates

QUALIFIED EXPENSES

    • Wages/bonuses paid to employees, including part time employees
    • Materials and supplies
    • Amounts paid to independent contractors
    • Amounts paid to outside firms providing services to your business
WHO MAY CLAIM THE CREDIT?

All types of entities may claim the credit, including. Whether your business is a C corporation, S corporation, LLC, partnership, or co-op.

Contact Us: Howard & Howard has a dedicated team of engineers and tax professionals specializing in federal and state tax credits and incentives. We take the time to understand your business and help you understand how this and other similar business incentives can save you money!