• Beginning in 2025, domestic R&D expenses under Section 174 will once again be immediately deductible, offering potential cash flow benefits.

• Companies that previously amortized R&D costs may be able to file Form 3115 and adjust past filings to recapture deductions.

• With IRS scrutiny rising and state tax rules varying, proactive planning and clear documentation are critical to maximizing benefits and minimizing risk.

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The return of immediate research and development (R&D) expenses under Section 174 is one of the most consequential shifts in the 2025 tax landscape — yet many mid-market companies have not updated their plans to reflect the change. From documentation of risk to transition-year amendments, these are the most common questions we’re hearing from finance and tax leaders:

What exactly is changing with Section 174 in 2025?

Beginning in tax year 2025, domestic R&D expenditures will once again be immediately deductible in the year incurred. This change reverses the five-year amortization requirement introduced under the Tax Cuts and Jobs Act (TCJA). However, current IRS guidance shows that amortization will still apply to certain foreign R&D expenses unless more legislative or regulatory relief is provided. Businesses should evaluate both domestic and international R&D classifications in preparation for the shift.

Will this improve our 2025 cash flow position?

It may — provided the new expensing rules are properly integrated into your financial and tax forecasting. Immediate expensing of domestic R&D reduces taxable income in the same year the costs are incurred, lowering overall tax liability. Companies that have not yet adjusted their estimated tax payments or quarterly modeling may be overstating liabilities and missing near-term cash flow efficiencies.

Can we amend our 2022–2024 returns based on this update?

In some cases, yes. Companies that previously amortized Section 174 expenses may be eligible to file Form 3115 to change their accounting method and apply a Section 481(a) adjustment. This could allow for partial or full deduction of deferred R&D costs in 2025. However, the benefits and eligibility vary depending on your current method, the types of R&D involved (domestic versus foreign), and whether returns were previously extended, filed, or audited. A review of your filing history and applicable IRS guidance is necessary before proceeding.

Currently, there is uncertainty as to whether Form 3115 will be required to change the method from capitalization to expensing of these costs. The IRS needs to provide guidance in this area and whether or not small businesses that have average annual gross receipts of under $31 million that have not filed their 2024 tax return yet will need to capitalize their R&D costs on the 2024 tax return and then file an amended return to expense these costs.

Should we still separate costs that qualify for the R&D tax credit?

Yes — and this distinction is critical. While Section 174 requires capitalization (or expensing, beginning in 2025) of all R&D costs, the R&D tax credit under Section 41 applies to a narrower subset of those costs. Documentation should clearly delineate which expenditures qualify for credit versus which are deducted under Section 174. Maintaining separate records supports credit claims and mitigates examination risk.

Will this affect our state tax filings?

It may. Some states conform to federal Section 174 treatment automatically, while others decouple and apply their own rules. This can create differences in how R&D is deducted at the state level. For companies working in multiple states, it’s important to review each jurisdiction’s treatment of R&D expenses and track how decoupling may affect apportionment, deductions, and compliance requirements.

What are CFOs and tax leads overlooking most frequently?

In our recent tax reform webinar polling, we asked CFOs and tax leaders how Section 174 has impacted their company’s R&D and tax planning. Their responses:

• 17% said Section 174 changes had a significant impact

• 24% said they made some adjustments

• Over 50% indicated the impact was minimal or unclear

This suggests a gap between policy changes and planning execution. Many companies have not yet updated forecasts or examined whether transition-year filings could improve cash position. As a result, opportunities to unlock deductions or perfect quarterly payments may be unrealized.

What actions should we be taking now? 

Section 174 expensing should be addressed proactively during 2024 planning and Q3-Q4 reviews. Start by reviewing how R&D is treated in your current financial models and incorporate the updated expense rules into your 2025–2026 forecasts. If you amortized expenses in prior years, evaluate whether filing a method change (Form 3115) could allow you to recapture deductions, depending on what guidance is issued by the IRS from a procedural standpoint.

It’s also essential to keep clear and contemporaneous documentation — especially if you’re claiming R&D credit or have international R&D exposure. The IRS has increased scrutiny around improper claims and substantiation. Additionally, continue checking IRS guidance related to foreign R&D and coordinate any tax position changes with your broader strategy and compliance obligations.

Strategic Considerations

Section 174 expensing brings welcome relief for businesses investing in innovation, but it also introduces complexity — especially for companies with multi-year R&D planning or global footprints. By updating forecasts, assessing historical filings, and aligning documentation now, CFOs and tax leaders can better prepare for the 2025 transition and minimize risk. Early action supports stronger compliance, cash management, and credit positioning in an evolving regulatory environment.

How MGO Can Help

Our tax professionals have deep experience navigating the complexities of Section 174 and R&D credits. Whether you need help modeling the impact of immediate expensing, evaluating a method change, or separating costs for credit eligibility, we can guide you through every step. Contact us today to align your R&D strategy with the latest tax reforms and uncover potential savings.

The post Answers to Your FAQs About Section 174 R&D Expensing appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Cross-border supply chain changes can trigger exit taxes, compliance penalties, and tax inefficiencies if not planned with international tax in mind.

• Proactive coordination between tax and operations helps reduce global tax exposure, unlock incentives, and speed of execution across jurisdictions.

• Country-by-country reporting (CbCR), transfer pricing alignment, and entity structuring are critical to avoiding double taxation and audit risk.

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Global supply chain changes are rarely just operational — they’re deeply connected to international tax exposure. From exit taxes and transfer pricing risks to missed incentives and compliance hurdles, tax leaders must be part of the decision-making process from day one.

6 Supply Chain and International Tax FAQs

In this FAQ, we answer the most frequent questions our clients ask when planning cross-border restructurings, relocations, or supplier changes — so your business can move faster, smarter, and with fewer tax surprises.

1. What are the international tax risks when shifting supply chain operations?

Relocating manufacturing, coordination, or key functions across borders creates exposure to multiple tax regimes. Common risks areas include exit taxes, transfer pricing, permanent establishment issues, and customs duties. Without early tax planning, these costs can result in long-term liabilities or missed opportunities.

2. How do exit taxes work, and when do they apply?

Exit taxes are levied when valuable functions, assets, or risks — such as intellectual property (IP), staff, or customer relationships — are moved between countries. For example, transferring IP from Ireland to the U.S. may trigger a deemed disposal under Irish tax law. These taxes can be significant and must be modeled early in any restructuring.

3. What should I know about transfer pricing when moving suppliers or functions?

Transfer pricing must reflect your current business operations. If you shift suppliers, relocate production, or move functions without updating your intercompany pricing, tax authorities may challenge the arrangement — leading to adjustments, penalties, and double taxation. All intercompany agreements and transfer pricing documentation must align with your post-change structure.

4. Are there tax incentives available when reshoring or nearshoring operations?

Yes. Countries such as the U.S., Canada, Mexico, Ireland, and Singapore offer targeted tax credits and incentives for domestic investment, clean energy transitions, and R&D localization. Examples include:

• U.S. federal/state manufacturing credits

• Job creation and infrastructure grants

• R&D and capital investment incentives

However, these must be planned early to capture their full value.

5. How can technology help manage international tax complexity?

Tax technology platforms help model jurisdictional impact, manage data for compliance reporting (like CbCR), and simulate the tax effects of operational changes. Integrated enterprise resource planning (ERP) and tax systems also improve visibility and reduce risk in real-time decision-making.

6. What role should international tax play in supply chain strategy?

International tax teams should be involved from the start of any supply chain realignment. Embedding tax early helps you find risks, unlock incentives, and structure deals for long-term compliance and flexibility. A reactive approach often results in avoidable costs, delays, and exposure.

Next Steps for Smarter Global Planning

Successfully navigating international tax risks requires more than compliance — it takes a forward-thinking approach aligned with your global operations. At MGO, we support CFOs and tax leaders with international tax planning, transfer pricing analysis, and incentive identification to help reduce exposure and drive business agility.

Learn more about our International Tax and Transfer Pricing services or contact us to discuss how we can support your global growth strategy.

The post Frequently Asked Questions About International Tax and Supply Chain Realignment appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The One Big Beautiful Bill Act accelerates clean energy tax credit deadlines and tightens eligibility for state and local governments and Tribal nations.

• Key credits for EV fleets, charging stations, and clean power generation now require faster project timelines to qualify.

• Acting now could help your government or Tribal nation preserve access to millions in federal clean energy funding before it disappears.

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In recent years, federal incentives have made it easier for state and local government and Tribal nations to fund sustainability projects such as electric vehicle (EV) fleets, charging stations, and renewable energy power infrastructure. But many of these benefits are now expiring sooner than expected.

The One Big Beautiful Bill Act (OBBBA) accelerates the deadlines and narrows the eligibility criteria for several cornerstone energy tax credits. These changes are already affecting planning decisions for fiscal year 2025 and beyond. If you don’t take action soon, your government or Tribal nation could lose access to millions of dollars in direct federal support for clean energy projects.

From the IRA to OBBBA: How We Got Here

When Congress passed the Inflation Reduction Act (IRA) of 2022, it dramatically expanded clean energy incentives across the country. Most notably, it introduced elective pay (also called direct pay) starting with tax years beginning after December 31, 2022 — giving state and local governments and Tribal nations the ability to receive the full value of qualifying clean energy tax credits as a cash payment from the IRS even if they have no federal tax liability.

The elective pay option helped governments, Tribes, and nonprofits (tax-exempt) launch projects that previously lacked financial viability. However, with the passage of the OBBA on July 4, 2025, new restrictions are coming into play. Understanding these changes is essential if you want to stay on track — and fully capture the credits you’re eligible for.

What’s Changing — and What It Means for Your Government or Tribal Nation

Several key clean energy tax credits have been modified under the OBBBA. Here’s what’s changing and how it could affect your clean energy initiatives:

Commercial Clean Vehicle Credit (§45W)

If your government or Tribal nation is planning to transition to electric buses, trucks, or light-duty fleet vehicles, this credit likely plays a critical role in your funding model.

Previous Rule:

Credit available through December 31, 2032

OBBA Update:

Accelerated expiration — vehicles must be placed in service by September 30, 2025

Credit Value:

• Up to $7,500 per vehicle under 14,000 pounds
• Up to $40,000 per vehicle over 14,000 pounds

What This Means for You:

Fleet upgrades must be finalized soon. Procurement and delivery timelines are critical — if vehicles aren’t placed in service by the deadline, you may miss out entirely.

Alternative Fuel Infrastructure Credit (§30C)

If you’re installing EV charging stations or alternative fuel infrastructure (like hydrogen), this credit directly offsets installation costs.

Previous Rule:

Available through December 31, 2032

OBBA Update:

Accelerated expiration — equipment must be placed in service by June 30, 2026

Credit Value:

• 6% base credit, up to $100,000 per unit/port
• 30% credit when prevailing wage and apprenticeship requirements are met

What This Means for You:

If you have eligible projects in the pipeline, now is the time to accelerate timelines — ideally placing ports in service by the end of the current calendar year. This strategy could help you preserve credit eligibility.

Clean Electricity Investment and Production Credits (§48 and §48E)

These credits apply to large-scale clean energy generation projects — including solar, wind, and other qualifying technologies.

OBBA Update:

• Construction on wind and solar projects that begins by June 2026 (12 months from the passage of the OBBBA) is not subject to the accelerated placed-in-service date. These projects can be placed in service within four calendar years after the year construction begins.
• Accelerated timeline applies to wind and solar projects starting construction after June 2026. These projects must be placed in service by December 31, 2027.
• Prohibited foreign entity restrictions and material assistance applies for projects starting construction in 2026 or later, disqualifying projects with certain supply chain components.

Credit Value:

• 6% to 70% for investment credit
• Production credit varies depending on source and place-in-service date. Credit is between 0.3 cents to 2.8 cents/kWh.

What This Means for You:

Project lead times are long, especially for solar and wind. Now is the time to meet with relevant departments to identify project timelines and prioritize needs to begin construction by mid-2026. You should also assess any foreign involvement in current or planned energy projects as materials or partnerships linked to prohibited foreign entities could affect eligibility starting in 2026, and why starting construction by December 31, 2025, may be necessary for eligibility.

What You Should Do Now

These accelerated timelines mean waiting is no longer an option. To protect your ability to access elective pay and federal clean energy credits, you should:

• Engage tax and legal advisors immediately to review your current project portfolio and identify which initiatives can realistically meet the new requirements. Consider safe harbor strategies that might preserve current credit rates for projects already in development.
• Accelerate project timelines for any clean energy projects in your pipeline. Review permitting, financing, and construction schedules to ensure they align with new deadlines.
• Secure allocations and submit documentation now rather than waiting for more convenient timing. The administrative processes for these credits can be complex and time-consuming.
• Coordinate across departments to ensure your legal, tax, engineering, and procurement teams are aligned on the urgency of these changes and new timeline requirements.
• Explore transitional provisions or grandfathering opportunities that might apply to projects already in your planning pipeline.
• Stay agile with your project planning given ongoing legislative uncertainty around continued support for renewables under current terms.

Why These Changes Matter to Your Government or Tribal Nation

These credits represent not just funding — but flexibility. They make it possible to stretch your budget, pursue larger projects, and deliver visible environmental and economic benefits to your community. With federal support shifting, your ability to act decisively today will shape your portfolio for years to come. Delays now could mean leaving millions in funding on the table.

How MGO Can Help

Our team of experienced Tax Credits and Incentives professionals helps state and local governments and Tribal nations navigate the evolving clean energy tax landscape with confidence. We work closely with you to assess project eligibility, interpret the latest credit rules, and prepare the documentation required to claim elective pay. Don’t miss out on this critical funding for your government or Tribal nation — reach out to our team today.

The post New Clean Energy Credit Deadlines Are Here — Is Your Government or Tribal Nation Ready? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The IRS has prioritized ERC enforcement — focusing on eligibility, substantiation, and promoter-prepared claims.

• Many mid-market companies are under review or unclear on their ERC position, especially for Q3 2021 (a red flag for audits).

• CFOs should proactively review ERC filings, gather documentation, and consult with advisors to manage risk and avoid penalties.

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For most companies that claimed the Employee Retention Credit (ERC), the checks have long since cleared. But now the IRS is focusing on next steps — eligibility, substantiation, and calculation accuracy. Enforcement is no longer theoretical; it’s already happening.

Thanks to extended statutes of limitations, expanded audit budgets, and a public crackdown on abuse, ERC compliance has become one of the IRS’s highest priority areas.

Why the IRS Is Taking Aim

At its peak, the ERC offered up to $26,000 per employee, making it among the most generous pandemic-era incentives. But rapid rule change, shifting eligibility rules, and aggressive third-party promoters left many claims vulnerable to scrutiny. 

This environment led the IRS to flag ERC as a “high-risk” credit and, in turn, prompted significant congressional attention. Every ERC claim from 2020–2021 — valid or not — is now within the audit scope.

The Impact of the OBBA

The One Big Beautiful Bill Act (OBBBA) has reshaped the IRS’s enforcement strategy around the ERC. Enacted on July 4, 2025, the OBBBA:

• Disallows pending ERC claims for Q3 and Q4 of 2021 if they were submitted after January 31, 2024

• Preserves eligibility for taxpayers who filed prior to that date or already received refunds

• Extends the IRS statute of limitations for ERC audits from three years to six years

• Introduces new penalties, including a 20% penalty on erroneous refund claims — a provision previously only applied to income tax

• Adds due diligence standards for ERC promoters, requiring them to substantiate eligibility and amounts or face a $1,000 penalty per failure to comply 

Importantly, professional employer organizations (PEOs) are excluded from these due diligence penalty rules. 

With these expanded enforcement tools and clear audit triggers tied to filing dates, the IRS has a more defined roadmap for which claims to prioritize — and Q3/Q4 2021 claims will likely be at the front of the line.

Where Your Peers Stand

During a recent MGO-hosted webinar with mid-market tax and finance leaders:

• ~60% said they are undergoing ERC review (internal or external)

• ~10% expect a formal audit

• ~30% reported being unsure of their current ERC status

This uncertainty is what the IRS is targeting — and it’s why companies need to revisit their filings now before the IRS does.

What the IRS Is Looking At

In early audits and soft letters, we’re seeing recurring red flags:

• Eligibility assumptions based on vague shutdowns or indirect disruptions

• Wage overlaps with Paycheck Protection Program (PPP) forgiveness, resulting in double-dipping

• Missing or incomplete documentation (e.g., health orders, employee schedules)

• Claims prepared by outsourced firms without backup or compliance support

Even if your claim is technically sound, a lack of documentation can lead to disallowance or penalties.

What Should CFOs and Tax Leaders Do Now?

Rather than waiting for an IRS inquiry, take proactive steps:

• Conduct a thorough review of ERC claims — with focus on Q3 2021

• Compile all supporting documentation (eligibility rationale, employee records, payroll data)

• Request full backup from any third-party preparers, especially if a legal review wasn’t performed

• Monitor for IRS soft letters or information documents requests (IDRs), which often precede formal audits

• Rescind your claim: If you have not received your ERC refunds or you have received your refunds and have not cashed them yet, and you are skeptical or uncomfortable with claiming the ERC, the IRS will allow you to rescind your claim for those quarters. Doing so may help you avoid penalties and interest.

Readiness isn’t just about paperwork. It’s about building a defendable position with confidence.

How MGO Can Support Your ERC Readiness

As enforcement ramps up, companies that take initial action will be best positioned to respond. Our ERC advisory professionals help clients evaluate risk exposure, gather proper documentation, and — when necessary — prepare for audit response or voluntary corrections. We work alongside CFOs, controllers, and tax teams to bring clarity and control to a complex compliance landscape.

Contact us today to schedule your ERC audit readiness review.

The post ERC Audits Are Escalating: What CFOs Need to Know appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Energy tax credits like §45W and §30C face 2025/2026 phaseouts, placing urgency on electric vehicle (EV) and charging station timelines for businesses planning capital expenditures.

• Many mid-market companies haven’t aligned project timelines with placed-in-service deadlines, risking partial or lost clean energy credits.

• Wage rules, documentation, and foreign-sourcing bans can disqualify credits — early compliance checks help preserve full tax benefit.

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For many businesses, the Inflation Reduction Act (IRA) was a green light to pursue electric vehicles, charging infrastructure, and other sustainable projects — backed by strong federal tax incentives. But in 2025, the rules have changed. And companies that haven’t adapted to new deadlines and eligibility requirements may leave valuable credits behind.

Tax provisions like §45W and §30C — which offer up to $7,500/$40,000 per EV and $100,000 per charging port — remain available. But with stricter placed-in-service timelines, prevailing wage requirements, and supply chain sourcing restrictions now in effect, the process has grown more complex.

At MGO, we’ve seen a growing sense of urgency among tax leaders and CFOs looking to retain the full value of these incentives. The common thread? It’s not enough to start building — you need to verify that your timeline, documentation, and sourcing all meet current standards.

What’s Changing — and Why It Matters

Businesses investing in clean energy may qualify for:

• §45W Commercial Clean Vehicle Credit: Up to $7,500 per eligible EV under 14,000 pounds (cars, vans, trucks, etc.) and up to $40,000 per eligible EV over 14,000 pounds (school buses, semi-trucks, etc.)

• §30C Alternative Fuel Infrastructure Credit: Up to $100,000 per qualified charging port

• § 48 (Pre-2025) Investment Tax Credit for Energy Property/§ 48E Clean Electricity Investment Tax Credit: 6% of qualified investment increased to 30% if a taxpayer meets prevailing wage and apprenticeship requirements or exceptions. Eligible to be transferred to an unrelated taxpayer.

But, beginning in 2025, these credits are affected by key IRS updates. Most notably:

• Credits are tied more strictly to placed-in-service deadlines

• For EVs, the deadline to place in service is September 30, 2025

• For charging ports, the deadline to place in service is June 30, 2026

• For wind and solar, allowed to be placed in service in four calendar years if construction occurs prior to June 30, 2026; if not, then deadline is December 31, 2027

• Bonus credits now require detailed compliance with wage and apprenticeship standards

• The foreign entity of concern rule may limit credit access based on component sourcing, particularly for EV batteries

In short, technical compliance now carries real financial consequences. Projects that would have qualified two years ago may fall short today — even if the investment itself hasn’t changed.

Where CFOs Stand on Readiness

During a recent MGO webinar, we asked mid-market tax leaders how ready they felt for the upcoming shift. Their responses reflected a common trend:

• 40% said they were not prepared

• 30% were somewhat prepared

• Only 5% were fully prepared

• 25% said it was not applicable to their business

This signals a significant planning gap. Despite rising investment in electric fleets and infrastructure, many companies haven’t realigned their tax strategy to fit the changing requirements. Without that alignment, even well-intentioned efforts can lose value.

Key Areas Where Companies Face Risk

Several issues have emerged as common barriers to full credit access:

• Project delays that affect placed-in-service eligibility

• Inconsistent wage documentation that disrupts bonus credit calculations

• Foreign-sourced components that invalidate certain credits

• Disconnection between tax and operations, leading to missed planning windows

As these rules evolve, companies that aren’t regularly reviewing their compliance posture may struggle to capture the full benefits — or may face clawbacks if later audited.

Planning Priorities for 2025

To prepare for the upcoming changes and protect your tax position, MGO recommends focusing on four core actions:

1. Check Placed-in-Service Schedules 

Review your project timelines to confirm that EVs, chargers, or facilities will be operational before IRS deadlines. Delays — even short ones — can affect eligibility. 

2. Coordinate with Tax Early

Bring your tax team into capital expenditure planning discussions to evaluate credit exposure and prioritize projects with the most favorable timelines and tax treatment.

3. Review Wage and Sourcing Documentation

Work closely with contractors and procurement teams to track wage compliance and verify sourcing for battery or component parts.

4. Run Credit Risk Scenarios 

Model potential loss of credits based on current projections, and adjust project sequencing or vendors accordingly to maintain incentive value.

How MGO Supports Clean Energy Credit Planning

MGO works with businesses across industries to evaluate, strengthen, and align your approach to energy tax incentives. Our teams help assess eligibility, document compliance, and provide the analysis you need to make informed decisions — especially as 2025/2026 deadlines draw closer.

If your organization is investing in EVs, charging stations, or energy property, now is the time to revisit how those projects connect to your tax strategy. Reach out to our Tax Credits and Incentives team today for support.

The post Clean Energy Tax Credits: 2025 Deadlines and Strategy appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Immediate R&D expensing may return in 2025, but many companies haven’t modeled the impact or updated their budgets to reflect the change.

• Heightened IRS scrutiny of the Employee Retention Credit is prompting CFOs to audit past claims and tighten documentation to avoid penalties.

• Accelerated clean energy credit deadlines are forcing businesses to fast-track investments and project timelines to maximize available incentives.

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The 2025 tax landscape is shifting dramatically — and mid-market CFOs and tax leaders are being forced to rethink their planning in real time. In a recent webinar hosted by MGO, hundreds of finance professionals weighed in on how three major areas are impacting their strategy: Section 174 research and development (R&D) treatment, IRS enforcement around the Employee Retention Credit (ERC), and the accelerated rollback of clean energy tax credits.

Here’s what your peers are saying — and what you should be doing now to stay ahead:

Key Insight #1: Section 174 Relief Is Coming — But Not Everyone Is Ready

Takeaway:

The upcoming allowance for immediate expensing of domestic R&D starting in 2025 offers cash flow relief. Yet many companies still haven’t modeled the impact — or taken advantage of transition-year elections.

Action items:

• Model multi-year R&D tax savings now

• Explore amending 2022–2024 returns under new rules

• Build R&D forecasting into 2025–2026 budgeting

Key Insight #2: ERC Enforcement Concerns Are Rising

Takeaway:
With expanded penalties, longer statutes of limitation, and uncapped promoter fines, the IRS is sending a clear message: ERC compliance is a top audit priority.

Action items:

• Conduct an internal audit of any ERC claims

• Review Q3 2021 filings for risk exposure

• Tighten documentation — especially for eligibility support

• Monitor communications from IRS for pre-audit activity

Key Insight #3: Clean Energy Credit Deadlines Require Immediate Action

Takeaway:
New end dates for §45W and §30C credits create urgency around construction, delivery, and placed-in-service deadlines. Many companies still haven’t adjusted timelines to capture full benefits.

Action items:

• Accelerate capital expenditure for EVs and charging infrastructure

• Confirm placed-in-service dates for Q3 and Q4 2025

• Consider design changes to meet prevailing wage rules

• Review supply chain for prohibited foreign entity risks

Proactive Beats Reactive in a Shifting Tax Environment

The 2025 tax landscape is a moving target, but that doesn’t mean you need to wait in limbo. CFOs and tax leaders who act early — by reassessing R&D strategies, auditing ERC positions, and accelerating energy investments — stand to gain the most. With cash flow, compliance, and credit all on the line, now is the moment to turn insights into action. Whether you’re facing uncertainty or opportunity, a proactive approach will help you lead with confidence and clarity in the year ahead.

How MGO Can Help

Our Credits and Incentives team is here to guide you through the complexities of today’s evolving tax environment. We can help your organization identify, model, and unlock tax-saving opportunities across R&D, clean energy, and other federal and state credit programs. Reach out to our team today to see how we can support your success in 2025 and beyond.

The post R&D, ERC, and Energy Credits: What 2025 Tax Reform Means for You appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Many architecture, engineering, and design-build firms qualify for valuable R&D tax credits, even if they don’t realize it.

• To claim credits, your projects must meet a four-part test and be supported by clear documentation showing experimentation and innovation.

• Recent tax law changes and IRS scrutiny make it important to review your contracts, track project activity, and work with knowledgeable tax professionals.

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If you operate an architecture, engineering, or design-build firm, you might assume research and development (R&D) tax credits are reserved for people in white lab coats working in biotech or software. That’s a common — and costly — misconception.

Many of the projects you take on every day may qualify for substantial federal (and even state) R&D tax credits, putting real money back in your business and freeing up resources to keep innovating.

This guide breaks down what qualifies, how to calculate your credit, the documentation you’ll need, and recent changes you need to be aware of — so you can start turning your design ingenuity into tax-saving power.

Understanding the Four-Part Test: Your Gateway to R&D Credits

To qualify for R&D credits, your activities must pass a four-part test that applies to each business component or project. Here’s what you need to demonstrate:

1. Permitted Purpose

Your work must serve a legitimate business purpose aimed at generating profit. This includes developing pilots, models, processes, certain engineering designs, certain building designs, or potentially specific components of larger projects.

2. Technological in Nature

You must utilize engineering, biological, chemical, or other hard sciences in your work. For architecture, engineering, and design-build firms, this typically involves engineering sciences applied to structural, mechanical, or environmental challenges.

3. Elimination of Uncertainty

There must be uncertainty in capability, method, or design at the project’s outset. If you know everything from the start, there’s no innovation involved. This uncertainty often exists in how to meet specific building codes, achieve proper tolerances, or address unique site constraints.

4. Process of Experimentation

You must engage in an iterative process through modeling, simulation, trial and error, or systematic testing. This doesn’t always require formal hypothesis testing — it’s about experimentation and trying different approaches to see what works.

What Qualifies: More Than You Think

Your everyday work likely includes numerous potentially qualifying activities, such as:

• Energy-efficient designs: Exploring materials that retain heat, affect structural loads, or meet Leadership in Energy and Environmental Design (LEED) certification requirements

• Alternative design concepts: Developing innovative solutions for unique geographical or structural constraints

• Advanced modeling techniques: Using computer-aided design (CAD) or building information modeling (BIM) software for experimental design modeling and analysis

• Innovative material use: Testing alternative materials for durability, sustainability, or specific performance characteristics

• Environmental and structural analysis: Optimizing water flow, ventilation systems, or designing for extreme weather conditions

Creating an optimal design for a healthcare facility to satisfy specifications regarding airflow rate and humidity rating may be a qualifying activity. So might proceeding through multiple iterations of CAD designs. Both of these examples could pass the four-part test.

Calculating Your Credit: Two Methods to Consider

You have two calculation methods available:

1. Regular Credit Method

Compares your current-year R&D costs to a historical fixed-base percentage of gross receipts and R&D expenses. This method is complex and best for firms with long histories of research expenses that have been documented.

2. Alternative Simplified Credit

Compares current-year costs to the average of the past three years. Most firms today use this method due to its straightforward approach.

Each tax year, you can choose the method that yields the higher benefit — but once chosen for that year, you’re locked in. Work with your tax advisor to evaluate both options annually.

Critical Pitfall: Contractual Provisions and Funded Research

Here’s where many firms stumble — the IRS scrutinizes whether your research is “funded” by someone else. Two key standards determine eligibility:

1. Risk of Loss Standard

Who bears the financial risk if the project fails to meet specifications? Cost-plus contracts typically don’t qualify because the client assumes financial risk. Fixed-fee contracts generally qualify because you bear the risk of cost overruns.

2. Substantial Rights Standard

Do you retain intellectual property rights to your designs and methodologies? Can you use knowledge gained from one project on future projects without paying licensing fees?

The IRS examines the “four corners” of your contracts — what’s written matters more than your typical business practices. If your contracts are silent on these issues, your actual business practices may be considered (but this creates less certainty).

Documentation: Your Defense Strategy

Proper documentation is crucial for surviving potential IRS scrutiny. Maintain detailed records of:

• Project files: Keep all design versions showing your iterative process

• Employee activity logs: Track who worked on R&D activities and for how long

• Design evolution: Document changes from version one to version two, explaining why modifications were necessary

• Testing data: Preserve results from any outside testing or certification

• Meeting notes: Record discussions about project challenges and innovative solutions

The key is demonstrating your experimentation process: showing uncertainty existed at the project’s beginning and tracking your attempts to eliminate that uncertainty.

Special Opportunities for Smaller Firms

If your firm has less than $5 million in gross receipts over the tax year and your firm had no gross receipts for any tax year preceding the five-tax-year period ending with the current tax year, you may be able to  offset R&D credits against payroll taxes rather than income taxes. This payroll tax election provides immediate cash flow benefits up to $500,000 annually — particularly valuable for startups or firms without significant tax liability.

Form 6765: What’s New and Complex

The R&D credit form has expanded significantly, now requiring detailed disclosure of:

• Each business component (project) claiming credits

• Officer wages included in calculations

• Specific breakdown of wages, supplies, and expenses by component

• Documentation of how each project meets the four-part test

This complexity underscores the importance of working with experienced R&D credit specialists rather than attempting DIY compliance.

Taking Action

R&D tax credits represent one of the most overlooked opportunities for architecture, engineering, and design-build firms. If you’re designing innovative solutions, addressing unique challenges, or using iterative processes to solve complex problems, you may likely qualify for substantial credits.

Don’t let misconceptions about “real R&D” cost your firm hundreds of thousands in tax savings. The combination of federal credits, potential state credits, and complementary incentives like cost segregation and energy efficiency deductions can dramatically improve your bottom line.

Start by reviewing your current projects through the lens of the four-part test, examine your contractual provisions for rights and risk allocation, and establish documentation systems to capture your innovation processes. With proper planning and experienced guidance, R&D tax credits can become a significant competitive advantage for your firm.

How MGO Can Help

Our Tax Credits and Incentives professionals work closely with architecture, engineering, design-build, and planning firms to help you identify eligible activities, calculate your credit, and build documentation to support your claim. We also help align your credit strategy with your broader tax and cash flow planning.

Curious if you’re leaving money on the table? Take our R&D tax credit self-assessment to uncover potential savings opportunities. By answering a few simple questions, you’ll gain insights into whether your company could qualify for valuable R&D tax credits.

The post Claiming R&D Tax Credits for Your Architecture, Engineering, or Design-Build Firm appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• R&D Tax Credits offer a dollar-for-dollar tax reduction for businesses conducting qualified research and innovation.

• Recent tax law changes require R&E expenses to be amortized over five or 15 years, requiring companies to rethink strategies.

• Maintaining thorough documentation is critical for maximizing credit claims and reducing compliance risks.

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The research and development (R&D) tax credit offers substantial tax savings for businesses conducting innovative research. It supports technological progress by reducing tax liability for companies engaged in qualifying R&D activities. However, taking full advantage of these benefits requires a clear understanding of eligibility requirements, documentation best practices, and recent regulatory changes that affect credit claims.

Understanding the Financial Impact of the R&D Tax Credit

The financial benefits of the R&D tax credit are significant, yet many businesses do not claim the full amount they’re eligible for. In fact, less than 20% of qualifying businesses take advantage of this credit — leaving millions of dollars in unclaimed tax savings each year.

How Much Can a Business Save?

Companies that properly document and claim the R&D tax credit can offset qualified research expenditures with tax savings. With the U.S. government providing over $10 billion in R&D tax credits annually, this incentive offers a significant opportunity for innovation-driven companies.

For small and mid-sized businesses, the credit can also be applied against payroll taxes — providing up to $500,000 per year in offsets, a crucial benefit for startups and companies with little or no income tax liability.

Industries Benefiting the Most

Several industries see substantial benefits from R&D tax credits:

• 35% of total R&D credit claims go to manufacturing companies

• 25% of credits go to software and technology companies, particularly those engaged in software development and automation.

• 15% of credits help biotech and life sciences, where companies often conduct research in pharmaceuticals, medical devices, and genetics.

Despite these industry trends, many companies mistakenly assume they don’t qualify — missing valuable tax-saving opportunities.

Recent Legislative Changes Impacting R&D Tax Savings

Businesses claiming the R&D tax credit must also consider legislative changes affecting tax planning. Prior to 2022, companies could deduct R&D expenditures all at once — improving cash flow. However, under the Tax Cuts and Jobs Act (TCJA), IRC 174 now mandates that R&D expenses be amortized over five years for domestic research and 15 years for foreign research. This change delays tax benefits and requires companies to rethink long-term tax strategies.

To illustrate:

• Before the change (tax years starting in 2021 or earlier): A company spending $1 million on R&D could deduct the full amount in the same tax year, significantly lowering taxable income.

• After the change (tax years starting in 2022 or later): That same company can only deduct $100,000 in the first year and then $200,000 per year for the next four years and then $100,000 in the fifth year for domestic R&D, increasing short-term tax liabilities.

This shift can make the credit more valuable to offset this increased tax and makes careful documentation and tax planning even more essential when filing for R&D credits.

Unlocking Tax Savings: Why Now is the Time to Act

With billions of dollars in credits available, and potential tax law changes on the horizon, you should act now to maximize tax savings. This includes:

• Reviewing eligibility criteria to include all qualifying research activities.

• Tracking and documenting expenses meticulously to support credit claims.

• Staying informed about legislative updates that could reinstate non-amortized deductions.

How MGO Can Help

Understanding the financial impact of R&D tax credits and adapting to new regulations can be challenging. Our R&D Tax Credit team can help your business evaluate eligibility, improve credit calculations, and develop strong documentation to support your claims. With experience across manufacturing, technology, life sciences, and other industries, we can help your company use tax incentives to fuel growth and further innovation.

To explore how your business can benefit, visit MGO’s R&D Tax Credit Services.

The post Maximizing the R&D Tax Credit: A Guide for Innovation-Driven Businesses appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• R&D tax credits can offset a company’s qualified research expenditures, with more than $10 billion in credits claimed annually.

• While industries like manufacturing, software, and biotech benefit the most, many eligible businesses (across industries) overlook the credit. 

• Recent tax law changes require R&D expenses to be amortized, making careful documentation and tax planning essential.

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The research and development (R&D) tax credit offers substantial tax savings for businesses conducting innovative research. It supports technological progress by reducing tax liability for companies engaged in qualifying R&D activities.

While the credit provides critical financial relief, your business must stay ahead of regulatory changes and compliance requirements to maximize its benefits. Recent modifications — including mandatory amortization of R&E expenses under IRC 174 — have added new layers of complexity to tax planning.

Understanding the Financial Impact of R&D Tax Credits

The R&D tax credit can significantly reduce tax burdens, yet many businesses do not claim their full eligible amount. In fact, less than 20% of qualifying businesses take advantage of this credit — leaving millions in unclaimed tax savings.

How Much Can a Business Save?

Companies that properly document and claim the R&D tax credit can offset qualified research expenditures back in tax savings. In total, businesses claim over $10 billion annually through this incentive. 

For startups and small businesses, the credit can also be applied against payroll taxes — offering up to $500,000 per year in offsets. This is a key benefit for companies that are pre-revenue or have limited taxable income.

Industries Benefiting the Most

Several industries consistently receive help from R&D tax credits. Manufacturing leads the way with 35% of total claims. Close behind are software and technology (25%), with companies conducting R&D to develop new software, automation tools, or cloud-based solutions; and life sciences and biotech (15%), with research activities in pharmaceuticals, medical devices, and genetics.

• Despite these trends, many businesses mistakenly believe they don’t qualify — overlooking valuable tax-saving opportunities.

Regulatory Changes Affecting R&D Tax Planning

For tax years before 2022, businesses could fully deduct R&D expenses in the year they were incurred, providing immediate tax benefits. However, under the Tax Cuts and Jobs Act (TCJA), a key change to IRC 174 took effect for tax years beginning after December 31, 2021. Now, businesses must amortize R&D costs over multiple years rather than deducting them all at once.

• This shift increases taxable income in the short term, making careful tax planning and documentation even more important if your business claims or plans to claim the R&D tax credit.

Common Pitfalls and Compliance Challenges

Not meeting compliance standards or properly documenting R&D activities can lead to reduced or denied credits. Common mistakes include:

• Insufficient documentation: Lack of detailed project records and technical reports to support credit claims.

• Misclassifying costs: Including expenses like market research or routine quality testing that do not qualify.

• Overlooking payroll tax offsets: Small businesses are missing the opportunity to apply the credit against payroll tax liabilities.

To avoid these issues, your company must develop clear processes for tracking research activities and keep strong documentation to support credit claims.

Maximizing R&D Tax Credit Benefits

Your business can take several proactive steps to improve its R&D tax credit claims. Maintaining detailed records of research projects, employee activities, and technical findings is essential. Proper tracking of time logs, technical reports, and iterative testing processes strengthens credit claims and supports compliance.

Choosing the most helpful credit calculation method also plays a key role in maximizing tax savings. The regular research credit (RRC) method can offer higher benefits for businesses with a consistent R&D investment history, while the alternative simplified credit (ASC) method is often easier to apply and requires less historical data.

Additionally, staying informed about potential legislative changes is important. Congress has debated reinstating immediate expensing for R&D costs, which would allow businesses to deduct expenses upfront rather than amortizing them over time. Keeping an eye on tax policy developments can help your business adapt your tax planning strategy accordingly.

MGO’s R&D Tax Credit Team Can Help

Keeping up with R&D tax credit regulations and maximizing benefits requires a strong understanding of tax law and compliance requirements. Our R&D Tax Credit team can help your business find eligible research activities, improve credit calculations, and develop thorough documentation to support claims.

With experience across manufacturing, technology, life sciences, and other industries, we can help your company navigate tax incentives that support innovation and financial growth. To learn more about how MGO can support your business, visit MGO’s R&D Tax Credit Services.

The post Navigating Regulatory Challenges in R&D Tax Credit Claims appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• The IRS’s revised Form 6765 maintains the business component detail (Section G), offers exemptions for smaller taxpayers, and refines R&D credit examinations to reduce improper claims while easing burdens on compliant taxpayers.

• The IRS is intensifying audits and increasing documentation requirements for research credit claims, aiming to improve compliance and information accuracy.

• The Inflation Reduction Act introduces or modifies multiple energy-related credits (such as 45X, 45L, 48E, 45Y, 45Z, and 179D) with new monetization methods (direct pay and credit transfers) and bonus incentives, while the New Markets Tax Credit allocation has been doubled for 2025.

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Credit for Increasing Research Activities: Proposed Changes to Form 6765

The IRS announced the release of a revised draft of Form 6765, Credit for Increasing Research Activities, on June 21, 2024, that reflects feedback from external stakeholders. This follows the IRS’s efforts to tighten documentation requirements for claiming the research credit. In September 2023, the IRS previewed proposed changes to Form 6765, adding new sections for detailed business component information and reordering existing fields. These changes aimed to improve information consistency and quality for tax administration but were criticized as overly burdensome.

The updated draft retains Section E from the previous version but requires additional taxpayer information. The “Business Component Detail” section, now Section G, is optional for Qualified Small Business (QSB) taxpayers and those with total qualified research expenditures (QREs) of $1.5 million or less and gross receipts of $50 million or less. Additionally, the IRS reduced the number of business components to be reported in Section G, requiring 80% of total QREs in descending order by amount, capped at 50 business components. Special instructions will be provided for taxpayers using the ASC 730 directive. The revised Section G will be optional for all filers for tax year 2024 to allow taxpayers time to transition to the new format. As outlined by the IRS, Section G will be effective for tax year 2025.

Examination Environment

Currently, the IRS receives a significant number of returns claiming the research credit, which requires substantial examination resources from both taxpayers and the IRS. To determine effective tax administration for this issue, the IRS aims to clarify the requirements for claiming the research credit by considering all feedback received from stakeholders before finalizing any changes to Form 6765.

In response to ongoing concerns of improper claims of the research credit, the IRS has intensified its focus on reviewing these claims for nonconformities, including conducting more audits. Navigating the complexities of the research credit can be challenging, especially with the increased scrutiny, recent case law, and the newly implemented IRS compliance measures in place.

It is important for taxpayers to accurately determine eligibility, validate and properly record contemporaneous documentation to support research credit claims, and defend against examinations. Taxpayers should determine compliance with IRS regulations and proper eligibility for the research credit.

Tax Credit Monetization

The signing of the Inflation Reduction Act (IRA) on August 16, 2022, marked the largest-ever U.S. investment committed to combat climate change, allocating significant funds to energy security and clean energy programs over the next 10 years, including provisions incentivizing the manufacturing of clean energy equipment and the development of renewable energy generation.

Overall, the act modifies many of the current energy-related tax credits and introduces significant new credits and structures intended to facilitate long-term investment in the renewables industry. Capital investments in renewable energy or energy storage; manufacturing of solar, wind, and battery components; and the production and sale or use of renewable energy are activities that could benefit from the over 20 new or expanded IRA tax credits. The IRA also introduced new ways to monetize tax credits and additional bonus credit amounts for projects that meet prevailing wage and apprenticeship, energy community, and domestic content requirements.

45X — Advanced Manufacturing Production Tax Credit

The 45X advanced manufacturing production credit continues to be a valuable production tax credit meant to encourage the production and sale of energy components in the U.S., specifically related to solar, wind, batteries, and critical mineral components. To be eligible for the credit, components must be produced in the U.S. or U.S. possessions and be sold by the manufacturer to unrelated parties. The Department of Energy has released a full list of eligible components as defined in the IRA, with specific credit amounts that vary according to the component.

Manufacturers can also monetize 45X credits through a direct payment from the IRS for the first five years under Internal Revenue Code Section 6417. They may also transfer a portion or all the credit to another taxpayer through the direct transfer system Section 6418 election. The 45X credit is a statutory credit with no limit on the amount of funding available; however, the credit will begin to phase out beginning in 2030 and will be completely phased out after 2033. Manufacturers cannot claim 45X credits for any facility that has claimed a 48C credit.

45L Tax Credits for Zero Energy Ready Homes

Section 45L of the Internal Revenue Code offers tax credits for contractors building or significantly reconstructing energy-efficient homes. Eligible homes must meet ENERGY STAR or DOE Zero Energy Ready Home (ZERH) standards. The tax credit has two tiers: $5,000 for single-family or manufactured homes certified to ZERH standards, and $1,000 for multifamily units, increasing to $5,000 if prevailing wage requirements are met. This credit applies to qualifying homes acquired between 2023 and 2032, encouraging contractors to prioritize sustainable construction while benefiting from significant tax savings.

48E and 45Y Clean Electricity Investment and Production Credits

For energy property and qualified facilities placed in service after December 31, 2024, Sections 48E and 45Y will replace the longstanding investment tax credit and production tax credit under Sections 48 and 45. The new provisions adopt a technology-neutral approach, whereby qualification for the credits will generally not be based on specific technologies identified in the IRC, but rather on the ability to generate electricity without greenhouse gas emissions. This represents a significant departure from historical practices and is expected to expand the range of technologies eligible for tax credits. Other relevant provisions of the IRA, such as bonus credit additions and monetization options, will still apply to the new Sections 48E and 45Y.

45Z Clean Fuel Production Credit

The clean fuel production credit under Section 45Z will become effective for transportation fuel produced at a qualified facility after December 31, 2024. On May 31, 2024, the IRS issued Notice 2024-49, providing guidance on the necessary registration requirements to claim the credit. Fuel that meets additional criteria to qualify as sustainable aviation fuel (SAF) will be eligible for an increased credit amount. As in the case of other renewable credits, the emissions rate is crucial for purposes of the 45Z credit, because the emissions factor for the fuel will directly impact the credit amount. Additionally, prevailing wage and apprenticeship rules will apply to Section 45Z qualified facilities, with certain exceptions.

Section 179D

The Section 179D tax deduction rewards businesses for energy-efficient building upgrades, such as improved lighting, HVAC, and roofing. Starting in 2023, deductions range from $0.50 to $5.00 per square foot, depending on energy savings and whether prevailing wage and apprenticeship requirements are met. Projects meeting a 50% energy reduction and these requirements qualify for the maximum $5.00 deduction. Lower energy savings (25%-50%) or unmet requirements qualify for reduced rates.

Building owners, designers, and REITs can benefit by meeting energy standards like ASHRAE 90.1, reducing costs while boosting efficiency.

With the passage of Section 6418 as part of the IRA, certain renewable energy tax credits can now be transferred by companies that generate eligible credits to any qualified buyer seeking to purchase tax credits. Through credit transfers, taxpayers have the option to sell all or a portion of their credits in exchange for cash as part of their overall renewable energy goals if they are not able to fully utilize the benefit. Companies with a high amount of taxable income and therefore a larger appetite for tax credits are able to purchase these credits at a discount, with the sale proceeds improving the economics of clean energy development.

The market rate for the sale of credits will be highly dependent on the type of credit being transferred, as well as the substantiation and documentation related to the seller’s eligibility for the credit taken and any bonus credit amounts claimed. The current rate seen in the market for transferring credits is around $0.93 to $0.96 per $1 of credit, but these amounts are subject to change based on specific fact patterns for each individual transaction and the overall market trend.

Taxpayers considering buying or selling tax credits that are transferable under the IRA should be looking ahead and forecasting their potential tax liability and resulting appetite for buying and selling credits. These credits can be transferred and utilized against estimated quarterly payments as soon as transfer agreements are finalized. This expedited reduction in cash outlay for the buyer and monetization of credits for the seller is a consideration that should be taken into account for taxpayers that are interested in entering the market of transferring credits.

Bonus Credits

The Inflation Reduction Act not only introduced new and expanded credits for the investment in and production of renewable energy and its related components but also included provisions for bonus credit amounts subject to specific requirements.

The prevailing wage and apprenticeship (PWA) requirement is a 5x multiplier for certain credits that can bring the credit rate from 6% up to 30% by paying prevailing wages to all labor related to the construction, installation, alteration, and repair of eligible property. Additionally, taxpayers must determine that a specific percentage of these labor hours is performed by qualified apprentices.

The IRS and the Treasury Department issued final regulations on the PWA requirements in June 2024, and projects starting in 2025 and after will be unable to utilize the beginning of construction exemption. Other common credit additions available for taxpayers meeting energy community and domestic content requirements provide a 10% addition to the base rate of the credit. Taxpayer documentation will be required to substantiate the claim of these bonus credit amounts and will need to be presented to a buyer in the event that these credits are transferred under Section 6418.

Taxpayers that have current or proposed investments or activities for which they plan to utilize the PWA multiplier should be formulating a documentation strategy and procedure. In the event of an IRS audit or transfer of these credits, taxpayers will be required to substantiate the wages paid to laborers, as well as the number of hours performed by registered apprentices. Depending on the size and amount of labor involved in qualified investments or production, documentation for PWA purposes, as well as for the domestic content requirements, will likely be a highly burdensome task if not planned for at the outset of a project.

New Markets Tax Credit (NMTC)

The federal NMTC program was established in 2000 to subsidize capital investments in eligible low-income census tracts. The subsidy provides upfront cash in the form of NMTC-subsidized loans at below-market interest rates (3%-3.5%). The loan principal is generally forgiven after a seven-year term, resulting in a permanent cash benefit. Funding for these subsidized loans is highly competitive and expected to be depleted quickly.

The U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund recently announced that, for 2025 only, it will double its annual allocation of NMTC funds. Taxpayers across multiple industries may be good candidates for the NMTC.

Applying for the NMTC program involves several steps that help determine the funding is allocated to projects that will have a meaningful impact on low-income communities. Applicants for the credit are evaluated based on the community impact derived from the investments (such as job creation, community services provided, etc.).

In a program as highly competitive as the NMTC, applying early can make the difference between securing a portion of the limited funds available or missing out on funding opportunities. Early applicants are often better positioned to take advantage of available opportunities, and additional benefits may be possible for those who act swiftly.

Taxpayers with ongoing or planned capital investments for later in 2024 or 2025 that are eligible to receive NMTC financing should begin reaching out to CDEs. Early outreach provides QALICBs a strong advantage in securing this financing due to the competitive nature and limited funds of the program.

How MGO Can Help

The changes introduced by the Inflation Reduction Act and the revised guidance for R&D credits offer significant opportunities for taxpayers across various industries. However, navigating these updates can be challenging for those who aren’t adequately prepared. Begin your efforts now by reassessing eligibility, refining documentation procedures, training key personnel, and ensuring you have enough time to address potential compliance hurdles. By proactively engaging with these new requirements, you can minimize disruptions and maintain clarity, accuracy, and compliance in your tax strategies.

If you have questions about how these changes may affect your organization or need assistance enhancing your credits, contact MGO to connect with our experienced professionals. We’re here to help you navigate these evolving regulations and seize the full benefits of available tax incentives.

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