2012 Act Reinstates Valuable Tax Credits

Research Tax Credit: The R&D tax credit rewards companies for the development or improvement of their products, processes, techniques, formulas, inventions or software applications(1). It's a wage-based credit, meaning it's determined by quantifying each staff member's time spent on research and experimental activities and multiplying by his wages; consequently, the credit is most financially beneficial to multi-million dollars laboratories that have the staff wages and time to spend enough hours to qualify for the credit.

Eligible activities for laboratories may include:

• Experimenting with the latest processes and technology.

• Researching different substructure materials.

• Testing new porcelains, composites, acrylics or other materials.

• Developing new techniques and formulas.

It's a dollar-for-dollar credit against the taxpayer's federal income tax liability. Taxpayers benefit from the deduction in the year the...