R&D Tax Credit Set For Administrative Expansion, Despite Lapse In Congress
This article was originally published in The Gray Sheet
A proposal from the Internal Revenue Service set to be finalized this year would expand the research and experimentation tax credit by making prototypes that are sold eligible for the credit. Meanwhile, the tax credit actually expired on Dec. 31, but lawmakers are working to reauthorize it retroactively.
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Senators eager to make a popular, two-year-long R&D tax credit permanent were thwarted again July 21 when the Finance Panel approved a package of temporary tax-extenders.
The Senate approved a tax-extenders bill that will retroactively renew the research and development tax credit for 2014 on a 76-16 vote, but the credit expires on Dec. 31. The bill was also approved by the House Dec. 3, and now goes to President Obama, who is expected to sign it.
The House Ways and Means Committee voted to make a recurring research tax credit for businesses permanent, while passing a separate bill to allow increased deductions for certain investments in property, equipment and computer software – both efforts beneficial to device firms.