BIG News! The “PATH” Act.
On December 18th of 2015 President Obama signed into law the “PATH” (People Against Tax Hikes) Act. You can argue that the signing into law of this legislation was Obama’s “one up” on President Bush’s 10-year tax cuts of 2001, but I surmise it was likely due to heavy Republican party pressure. But, let’s not get into that here…
The benefits of this act, to you as a U.S. businessman in the manufacturing or tech sector, are remarkable. Let’s talk about Fed Section 41 of the tax code.
Section 41, AKA the “improperly-named” Research & Development Tax Credit is a wage-based tax credit that allows businesses who perform “technically” oriented activities to take a 20% credit on their federal taxes on those wages while performing those activities. This list of “qualifying activities” far eclipses pure “research and development” activities you might think about, or be familiar with. See a non-exhaustive list of activities that could qualify you for the credit...click here.