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Thomson Adds Research Credit Guidance

ThomsonGuidance on the federal tax credit for increasing research and development) activities has been added to Thomson Reuters Checkpoint Catalyst. Made permanent by the 2015 PATH Act, the reinstated credit can now be used by businesses with revenue under $5 million in revenue to offset the alternative minimum tax.

Certain startups can utilize it to offset up to $250,000 in payroll tax.

Guidance includes a comprehensive examination of the legal principles and authorities governing the research credit. Among these are regulations issued in October addressing when taxpayers that develop their own internal use software can claim the credit.

Discussion focuses on which activities are treated as qualified research, what expenses are eligible for the credit, how the credit is computed, and how it should be documented.

Also included is discussion of the basic research credit for research performed with no commercial objective and the energy research credit.


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