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RESEARCH AND DEVELOPMENT TAX CREDIT SERVICES

MARSHALL S TEVENS OVERVIEW OF FEDERAL R&D TAX CREDIT

The Research and Development Tax Credit (R&D Tax Credit) was created by Congress as part of the Economic Recovery Act of 1981 to encourage American Industry to create and develop new products and processes, and increase future profitability through investment in new developments. The R&D credit is an often underutilized means of lowering your company’s tax burden. For the year 2009, the credit represented an estimated $5.6 billion federal subsidy. Yet, very few companies qualifying for federal research credits are actually claiming these tax incentives. Many companies routinely do work that qualifies for significant research tax credits as they attempt to create a product that is more reliable, durable, or has higher precision or accuracy. The definition is relatively broad and encompasses such activities as: • Developing new or improved products, processes or formulas; • Developing prototypes or models; • Developing or applying for patents; • Certification testing; • Developing new technology; • Environmental testing; • Developing or improving software technologies; • Building or improving manufacturing facilities; and • Streamlining internal processes. Benefits: • Millions of dollars in tax credits, resulting in cash back from the IRS for previous open tax years - usually three (3) years. • $1 for $1 reduction on current year’s tax liability • Additional tax savings in future years • Carry-forward up to twenty (20) years

WHO CAN USE IT?

LOS ANGELES

NEW YORK

Manufacturing

Tool and Die

Fabrication

Machine Shops

Engineering

Plastics Manufacturers

Software Developers

Pharmaceutical

Chemical

Biotechnology

Technology

Food Sciences/Manufacturers

PHILADELPHIA

CHICAGO

www.marshall-stevens.com

ST. LOUIS

TAMPA


A common misconception is that most companies are too small to qualify for the R&D Tax Credit or earn significant benefits. In fact, all companies qualify and can gain substantive tax benefits regardless of size. It is estimated that 5,000 out of 17,000 businesses using the R&D credit have assets of less than $1 million. Marshall & Stevens helps companies of all sizes determine and claim R&D credits for which they are legally entitled.

EXPERIENCE Marshall & Stevens’ professionals have handled claims as low as $100,000 and as high as $25 million. Our Business Incentives Group is led by a former Partner and co-founder of KPMG’s Business Incentives Practice, and includes a former practice leader from the same group and former State of California Franchise Tax Board auditor. The team has extensive experience with all major industries and taxing authority audits. Marshall & Stevens offers this service on a contingent basis, only requiring a nominal fee when returns are amended or credits are realized -- This separates us from almost all firms that offer this service. We work with you and your CPA firm to understand your needs and potential ROI.

MARSHALL & STEVENS BUSINESS INCENTIVES GROUP ..........................................................................................

CONTACTS: Barry Hacker Senior Managing Director Tel: 213.233.1503 Cell: 310.499.3910 bhacker@marshall-stevens.com Matt J. Trumbo Associate Tel: 213.233.1513 Cell: 818.370.5614 mtrumbo@marshall-stevens.com For more information about our team, please visit www.marshall-stevens.com

Quality Valuation Quality Decision Making Independence & Integrity

LOS ANGELES

NEW YORK

PHILADELPHIA

CHICAGO

ST. LOUIS

TAMPA


Research & Development Tax Credits