Are You Eligible for an R&D Tax Credit?

The deadline is April 1 for filing a 2011 claim for the new VA R&D credit. All those hoping to share in the $5M available from the state in current cash payments must file required forms by that date. Qualification for the credit is complicated and even many tax preparers have little experience working with the detailed Federal rules, which Virginia generally follows. You will need knowledgeable resources to perform the necessary analysis, which would also identify eligible Federal credits which may only be offset against the taxpayer's Federal liability. The rules are complex, but the refundable VA credit may approximate a net 7.5-10% of the first $335,000-350,000 of qualifying expenditures, or a cash refund up to $25,000. VA forms and filing instructions are located at https://www.tax.virginia.gov/taxforms/Business/Credits/RDC.pdf. You may be eligible for much larger Federal credits if your qualifying expenditures exceed the VA limits. 

If you think your business has conducted R&D on new or improved products or processes in 2011, and would like to determine your eligibility for these benefits feel free to contact Brian Monbouquette 804-955-4301 / brianm@fahrenheitfinance.com or contact your tax advisor.