ABOUT RTC
| Research Tax Credit (RTC) The Research Tax Credit or Research and Experimentation Tax Credit is legislated under IRC Section 41. It is a 20 percent federal dollar-for-dollar credit against tax paid and/or taxes owed. The credit is calculated on qualified research expenditures that exceed a base amount, resulting in a net tax benefit of approximately 6.5 percent of qualified research expenditures. There are state Research Tax Credits available as well. The RTC is a reduction in tax liability, not a deduction. Companies that claim the R&D tax credit can still claim tax deductions for R&D expenses. U.S. firms are entitled to utilize the credit for all their open tax years that are not statue barred – usually three years plus current year. Excess credits that are unused can be carried forward 20 years. Companies are permitted to go back and do amendments to their returns and recapture taxes that were paid in the form of cash refunds. The RTC is one of the most effective tax reduction strategies a company can employ. Pinnacle can help you implement a successful Research Tax Credit program for your company and help grow your bottom line. Also see History of the R&D Tax Credit |
