Benefits Available from R&D Tax Extension

Some good news did actually come out of the 2014 Virginia legislative session. The benefits available from the VA Research and Development Tax Credit have been expanded and extended to 2018. For 2014, 15% or 20% of qualifying R&D expenses (the higher amount applies if the research was conducted in connection with a VA college or university) can be refunded in cash to the taxpayer or its owners. Because the actual maximum refund depends on the number of taxpayers who claim credits, past history suggests that the maximum 2014 cash refund for a taxpayer incurring at least $234,000 in qualified expenditures is between $46,800 and $93,600 (for university-connected research) and $35,100 to $70,200 for all other taxpayers.

Eligibility for the VA credits is very similar to the Federal R&D credit program. The Federal program is expected to be extended and liberalized by Congress shortly, so that eligibility for Federal and state credits should be more valuable than ever in 2014.  More details on this and other tax law changes can be found here.

If you have questions or want to discuss tax strategy, please give us Brian Monbouquette a call.

Brian works with middle market and emerging growth companies as an interim or fractional CFO, and as a financial consultant applying his extensive experience in tax, capital raising, M&A and partnering. Brian has 30+ years of experience as a former Big 4 and regional firm tax partner, and as a CFO for a variety of high growth companies, predominantly with firms in healthcare/life sciences, software/Internet services, clean energy manufacturing and other services.

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