R&D Credits and IC-DISC Incentives

R&D Credits and IC-DISC Incentives

The IRS Tax Code provides generous benefits for performing research and development. This includes more than the traditional scientist in a white lab coat. The government and the courts have expanded what qualifies, so now anyone that designs, invents, writes software, or improves products or processes, or develops better techniques may qualify for a tax credit. And since 2016, new rules may allow certain small businesses to elect to use the R&D credit to offset employer-paid FICA tax liability.

Interest-Charge Domestic International Sales Corporation [IC-DISC] export tax incentive for small and medium manufacturers. The tax laws provide an opportunity for a company to use an IC-DISC to have the tax on 50% of its export income reduced by more than 50%. Profits are taxed at the dividend rate (currently 20%) as opposed to ordinary income tax rates (top rate currently 39.6%). Who can benefit? 1) company that directly exports goods it manufacturers, 2) company that provides architectural or engineering services that are conducted inthe US for a building/bridge built outside of the US, 3) company manufacturers a good that is included in a product that is exported.

Speaker
Burton Speer of Mengel Metzger Barr & Co. Burton has extensive experience working with privately held companies evaluating mergers and acquisition alternatives, and assisting clients as they develop strategies to expand into new states or countries. He specializes in corporate and individual taxation, taxation of partnerships and other pass through entities, multi-state taxation, merger and acquisition activity, and international issues.