Every year businesses save hundreds of thousands of dollars in taxes owed by using available business tax credits from the federal, state, and local governments. A tax credit is different from a deduction or an exemption. It is a bottom-line, dollar-for-dollar reduction of tax owed. These lucrative tax credits can often be rolled forward for future use or generate cash back now. Ask a tax expert, like Brunsdon Law Firm to help you understand the requirements for qualification.
Look For Business Tax Credits You Can Use
The government offers tax credits to promote certain business activities. Tax credits are often by industry, but can also be qualified by research methods, region or whether or not you are hiring the unemployed. Here are some examples:
- R&D Federal Tax Credits
Federal tax credits are available to any business that does research or development work. This was done during the Reagan administration to encourage the United States to stay technologically savvy. However, things you might not consider as R&D still count. If you try a new process in your manufacturing, it may count even though others in your industry are using it. It just has to be new to you. If you design something like a new way to install an HVAC system for a building, that may count. Labs and white coats do not define research and are not required.
- R&D State Tax Credits
Most states now have credits for R&D work and follow the federal guidelines above, but every state is different. Some have their own rules that differ from the federal guidelines.
- Ohio Job Creation Tax Credit (JCTC)
This 2009 law was enacted to encourage jobs in Ohio. Businesses must apply and be approved for this tax credit
- The Ohio Motion Picture Tax Incentive
Encouraging the making of movies in Ohio, this law provides a refundable credit for motion pictures at least partially produced in Ohio. - The Ohio Historic Preservation Tax Credit
This is a 25 percent tax credit for the rehabilitation expenses to owners and lessees of buildings listed on the National Register of Historic Places.
- The Ohio New Markets Tax Credit Program
This state tax credit is designed for the revitalization of communities. It encourages those who finance business investments in low-income communities to deliver below-market rate investment options to Ohio businesses.
- The Technology Investment Tax Credit Program
This innovative program allows Ohio taxpayers to reduce state taxes by 25-30% for investing in small R&D and technology-oriented firms. Both the investor and the company must meet requirements.
Seek a Knowledgeable Business Tax Advisor
Choose a tax advisor who stays current with the ever-changing laws and requirements of tax credits, like Terri Brunsdon of Brunsdon Law Firm. Terri is both an attorney and a CPA and has a master’s degree in Tax. Ask her which tax credits apply to you and how to claim them. Contact us at Brunsdon Law Firm today. She can help you sort through the maze of requirements for credits on business tax.
