R&D tax credit renewed through 2009

Many composites manufacturers may qualify for a little-used research and development tax credit that was recently extended through 2009.

Black Line Group (Minneapolis, Minn.), a provider of Research and Development (R&D) Tax Credit Services, has announced that Congress has approved a seamless two-year extension of the R&D Tax Credit, a tax credit for U.S. businesses that expired at the end of 2007.

The R&D tax credit provides support to U.S. businesses for research and development capital expenditures incurred in the United States. The extension is retroactive to January 1, 2008 and runs through 2009.  In addition, the bill also strengthens the R&D tax credit by increasing the rate for the Alternative Simplified Credit (ASC) to 14 percent in 2009 from 12 percent.

Because of its very specialized nature, large numbers of small and mid-size manufacturers are not taking advantage of this underused part of the tax code that provides qualifying firms with substantial tax benefits. The definition of research and development (R&D), under the credit, is broad. Manufacturers of all kinds, including composites manufacturers, often don't understand that they do in fact conduct R&D, usually through process development and improvement activities.

For companies that have not taken advantage of the R&D Tax Credit, credits can vary from tens of thousands of dollars to more than $100,000. In addition, companies can reduce future tax liabilities and improve cash flow.

Information: Visit www.blacklinegrp.com.