Tax credits are valuable incentives for both businesses and individuals, but the IRS and other government agencies do not always make it easy to claim the credits you are eligible for. Whether it is federally available tax credits or some other incentives offered by state and local governments, it pays to work with tax professionals who can help you navigate the complex rules, regulations, and application processes.
At Frost Law, our Special Credits practice group is led by Rebecca Sheppard, Esq. and Peter Haukebo, Esq. who assist clients in determining their eligibility for various tax credits, including the Employee Retention Credit (ERC), Research and Development (R&D) tax credits, and Opportunity Zone Funds. Together with the other tax attorneys and professionals on our team, Peter and Rebecca draw on their deep understanding of the tax code to support clients who want to leverage all available tax incentive opportunities for themselves and for their businesses.
The Employee Retention Credit (ERC) was created to provide financial relief to businesses that were adversely affected by the COVID-19 pandemic. This tax credit is available to businesses that experienced either a decline in revenue or a forced suspension of normal operations due to mandates from the federal, state and local governments.
It is also possible to qualify for this credit even if you received PPP loans. However, it is important to be careful with how these two credits interact with each other. The IRS is carefully examining businesses who claim the ERC, especially for PPP borrowers and claims made by unscrupulous ghost preparers.
For eligible businesses, the ERC can provide a maximum credit of up to $26,000 per employee retained based on the wages that were paid.
ERC can be a lifeline for businesses struggling to keep their doors open after weathering the pandemic. By working with a team of knowledgeable tax credit attorneys, you can better understand if you are taking full advantage of the benefits available.
The R&D tax credit is an incentive for businesses that can provide a dollar-for-dollar reduction in a company’s tax liability for up to 20% of the R&D cost, making it a fantastic resource for businesses looking to recoup money they invested.
However, the requirements for qualifying for the R&D tax credit are strict and documentation is critical.
Tax credit attorneys can help businesses understand these eligibility requirements for the R&D tax credit, as well as assist with the documentation and calculation to maximize the benefits available.
Opportunity Zone tax benefits are federal incentives for areas around the country that could benefit from economic investment. By investing in these zones with Qualified Opportunity Funds, investors may be eligible for these tax incentives by working with businesses or properties within these low-income communities.
These Opportunity Zone tax incentives offer a unique opportunity to invest in underserved communities while enjoying the benefits of significant tax savings. If you are interested in learning more, talking to tax credit attorneys can provide guidance on how to structure your investments in these areas to maximize tax benefits while navigating the regulatory requirements associated with these funds.
Federal, state, and local tax credits can be another valuable way to reduce your tax liability by aligning your investments with readily available governmental incentives. There are a number of tax credits for individual and businesses but the qualifications for them are frequently changing with new and updated legislation controlling these types of benefits.
Some examples of the tax credits made available by the state and local governments that our team have helped with include the DC Small Retailer Property Tax Relief Credit and SALT cap workarounds that the IRS has allowed for pass-through entities.
We can work with you on compliance assessments and crafting custom tax credit strategies that help you understand the federal, state, and local tax credits you may qualify for.
The sheer number of tax credits available to business owners makes it difficult to know if you have taken advantage of the opportunities that may apply to you and your business.
Talk with our team of tax credit attorneys today who can draw on their experience to help you better understand how to claim credits on the federal, state and local levels. These attorneys have a deep understanding of the latest tax legislation and can help identify valuable incentives that you might not be aware of.
Schedule a confidential consultation with our team at Frost Law by calling (410) 497-5947 or filling out our contact form so we may help you maximize the credits you are entitled to.