The Research & Experimentation Tax Credit To Be Made A Permanent Statute Through The Jobs For America Act of 2014

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Written by Peter J. Scalise | Posted in R&D Credit Services

On September 22nd, The House of Representatives passed, by a vote of 253 to 173, HR 4 entitled “The Jobs for America Act of 2014” (hereinafter “JAA”) , which would simplify and make permanent the I.R.C. § 41 Research and Experimentation Tax Credit (hereinafter “RTC”) on a retroactive basis. JAA also includes several other provisions previously approved by the House of Representatives to extend retroactively and on a permanent basis bonus depreciation; I.R.C. § 179 expensing; select S corporation provisions; and to repeal retroactively the medical device excise tax.

Among other changes to RTC, the bill would increase the Alternative Simplified Credit methodology (hereinafter “ASC”) rate to 20% and eliminate the “Regular” methodology option under Section A of Form 6765. This action by the House of Representatives is part of an ongoing effort by the House Ways and Means Committee to make permanent select expired tax provisions. In contrast, the Senate Finance Committee in early April approved an $85 billion ‘tax extenders’ bill (S. 2260) that would temporarily extend the RTC and more than 50 other expired or expiring tax provisions on a retroactive basis through the end of 2015. Senate efforts to act on the Finance tax extenders bill have been delayed due to a lack of agreement on which floor amendments could be considered.

The outlook for final legislative action on expired tax provisions remains uncertain. At this time, final action on tax extenders — including reconciling the House and Senate bills —could occur in the lame-duck session of Congress after the November midterm Congressional elections.

For legislative updates from Capitol Hill and complete coverage of the latest statutory, administrative, and judicial interpretations please connect with Peter J. Scalise on TaxConnections.

Peter J. Scalise

Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a highly distinguished BIG 4 Alumni Tax Practice Leader and has approximately twenty years of progressive public accounting experience developing, managing and leading multi-million dollar tax advisory practices on both a regional and national level.

Peter is a highly acclaimed thought leader in the fields of accounting and taxation with deep subject matter expertise in connection to designing, implementing and defending sustainable methodologies for specialty tax incentives including, but not limited to, research tax incentives; orphan drug credits; therapeutic discovery credits; accounting methods and periods; energy tax incentives in connection to green building envelope efficiency and benchmarking, solar energy, bio energies, fuel cells, wind turbines, micro turbines, and geothermal systems; and comprehensive fixed asset analysis incorporating principles of construction tax planning, cost segregation analysis and the final treasury regulations governing tangible property.

Peter is a renowned keynote speaker and an extensively published author on specialty tax incentives, tax controversy matters, and legislative updates from Capitol Hill for NAREIT, AGRION, USGBC, AICPA, ASTP, NATP, ABA, AIA, and TEI. Peter serves as a member of the Tax Faculty for CPAacademy, iShade and TaxConnections University (“TCU”). Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (“ASTP”) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable.