Tax planning isn’t something that just comes around at the end of each year. To ensure your company is taking advantage of all available opportunities to lower your tax responsibility, consider the following as you plan for 2021:
- Research and Development Tax Credit
While any qualifying activity must pass the four-part test (permitted purpose, technical uncertainty, process of experimentation and technical in nature), the Research and Development tax credit is applicable for more than you might think. One of the most frequently overlooked R&D tax credit opportunities is acquiring new and retaining current clients. Additionally, time spent discussing the requirements a client has for a specific project or modifying technical specifications are also potentially qualify for the R&D credit. Any manufacturing activities that improve upon an existing product or process may also qualify. These credits can be fairly significant when factoring in qualified R&D wages.
- Jobs Tax Credit
Where you do business may entitle you to various Jobs tax credits. If your company has produced new jobs in an enterprise or opportunity zone, the state you operate in may have a Job tax credit available. Click here for information from the state of Ohio.
- Retraining and Work Opportunity Tax Credits
Your employees are your greatest asset and there are a couple tax credits available that reflect that. First, if you train your employees to improve their skills as they relate to your business, costs incurred for learning new technology/software, tools or processes may be deductible. This deduction may also include employee wages during instruction/training as well as any outside instruction or materials used. This deduction varies from state to state. Second, if your company hires individuals who face challenges gaining employment, there is a good chance you qualify for the Work Opportunity tax credit. Here is a list of the targeted groups for this credit.
Tax responsibility opportunities change frequently and may be complex to accurately report, so talk with a tax professional at Corrigan Krause to make sure you’re taking full advantage of every opportunity to lower your tax responsibility.
We’re Here to Help
The professionals at Corrigan Krause can help ensure your manufacturing business is taking advantage of all tax credits available. Email firstname.lastname@example.org for more information.
Get Manufacturing News Sent to Your Inbox
Get up-to-date information on everything surround manufacturing sent directly to your inbox. Sign up for the Corrigan Krause Manufacturing Services newsletter today!