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Here, Casey Barka, Co-Founder and VP of Tax Credit Services for Strike Tax Advisory, shares three things mold builders need to understand about the R&D Tax Credit.
The moldmaking industry's highly innovative nature qualifies most mold builders for the R&D tax credit. Enacted in 1981, this credit rewards U.S.-based companies for their continuous investment in innovation, allowing businesses to recover up to 10% of their qualified R&D expenses. While this $22B government incentive remains one of the most lucrative tax credit reliefs, only one in three qualifying companies takes advantage of it. In late 2022 and early 2023, recent changes to various legislations could cause major impacts for mold builders.
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A few misconceptions that hinder companies from claiming the credit and highlight some of the recent changes include:
- CHIPS Act alters the R&D tax credit for the first time in 7 years
- Increasing R&D payroll tax credit provisions for start-ups
- Set aside an additional $39 billion for domestic manufacturing
- The TCJA is now in effect for the first tax filing deadline
- Changes to Section 174 and the impact on tracking and claiming expenses
- The need to have more rigorous bookkeeping to substantiate records
- Likelihood of increased tax burden
Watch the video interview above.
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