• 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.

• 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.

• 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.

The post Proposed Form 6765 Updates, Expanded IRA Energy Incentives, and Other Key Tax Credit Developments appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Changes to IRS Form 6765 require more documentation and detailed reporting for R&D tax credit claims starting with the 2024 tax year.

• Businesses will need to classify wages (direct R&D, supervisory, support) and find qualifying activities requiring better tracking systems.

• All new sections of Form 6765, including Section G, will be mandatory by 2025 — start preparing now to avoid compliance risks.

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The IRS has made significant updates to Form 6765, which businesses use to claim the Credit for Increasing Research Activities. These changes, effective for the 2024 tax year, require added reporting and documentation, making it critical for businesses to act now to prepare. Whether you’re already claiming the R&D Tax Credit or considering it, these changes will impact your filing process, increase compliance risks, and require new strategies to maximize your tax credits.

How These Changes Impact Your Business

The revised Form 6765 introduces several new sections that require more comprehensive reporting. While only certain sections (like Section G) are optional for the 2024 tax year, they will become mandatory by 2025. These changes increase the need for more specific documentation, detailed wage classifications, and clear identification of qualifying business components — meaning your businesses will need to enhance how it tracks and reports R&D activities.

For larger companies, the IRS’s ASC 730 directive offers an opportunity to simplify the process. This initiative is available to businesses with $10 million or more in assets that expense R&D costs under U.S. generally accepted accounting principles (GAAP) and have audited financial statements. If your business qualifies, the directive reduces documentation requirements, offering a more streamlined way to claim the R&D Tax Credit.

However, all businesses — whether large or mid-sized — will need to adjust their processes to be compliant. The IRS is putting a spotlight on areas such as officer wages and how businesses differentiate between direct R&D labor, supervisory roles, and support staff. These changes will require your business to carefully track and classify personnel expenses to meet the new reporting standards.

What You Should Do To Prepare Now

If your business relies on the R&D Tax Credit, or you’re considering claiming it for the first time, now is the time to act. The proposed changes will require adjustments to your processes to prepare before the updates become mandatory. Here are the key areas of focus:

• Expanded reporting requirements: The new sections will require more qualitative and quantitative detail about your R&D activities, including finding and describing specific business components and projects tied to credit.

• More specific wage tracking: You’ll need to classify wages more precisely, separating direct R&D labor from supervisory and support wages. Businesses without clear tracking systems in place will need to make updates to comply.

• Assessing compliance risk: The phased implementation of the new requirements (2024 for some sections and 2025 for all sections) gives you time to evaluate your readiness. Gaps in your documentation or systems could expose your business to compliance risks, so early forecasting and planning are critical.

• Leverage ASC 730 directive (if applicable): For businesses that qualify, the ASC 730 directive reduces documentation burdens and streamlines credit claims. Now is the time to decide if your company can take advantage of this opportunity or modify procedures/processes for the 2025 year to take advantage of the directive methodology.

What These Changes Mean for Your R&D Tax Credit Potential

The changes to Form 6765 present both challenges and opportunities for businesses. On the positive side, they provide greater clarity for taxpayers and make the credit more accessible for qualifying activities. However, they also increase the need for precise tracking, documentation, and proactive planning. Not adapting to these updates could result in missed opportunities to claim credit or increased exposure to compliance risks.

To position your business for success:

• Evaluate your current processes for capturing and reporting R&D expenses.

• Update your documentation practices to account for the IRS’s focus on wage classifications and business components.

• Review your eligibility for the ASC 730 directive to reduce administrative burdens where possible.

• Forecast how these changes will affect your credit claims in 2024 and 2025, putting the necessary systems in place.

Navigating the complexities of the updated IRS Form 6765 and maximizing your R&D tax credits can be challenging. At MGO, we specialize in helping businesses like yours understand and leverage tax incentives to their full potential. Our team of experienced tax professionals is well-versed in the latest IRS regulations and can offer personalized guidance tailored to your company’s unique needs.

Don’t leave valuable tax credits on the table — reach out to our Tax Credits and Incentives team today to see how we can help you refine your R&D tax credit claims and enhance your tax strategy.

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• Vineyards and wineries may qualify for the R&D tax credit if they develop new systems, automate processes, or experiment with sustainable agricultural practices.

• Claiming the credit can help businesses conserve cash for reinvestment.

• It’s crucial to document experimentation, material usage, and personnel involvement to support your claim.

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The research and development (R&D) tax credit is designed to incentivize organizations to invest in innovation in the U.S. It does this by providing companies dollar-for-dollar cash savings for performing activities related to developing, designing, or improving products, processes, formulas, or software.

Vineyards and wineries often overlook the R&D tax credit — but claiming it can boost your business’s bottom line. This article explores the types of activities that might qualify and how to claim it while minimizing audit risks.

What Activities Qualify for the R&D Credit?

To qualify, activities must meet the IRS’s four-part test:

1. Permitted purpose: The purpose of the activity must be to apply the information discovered to create or improve a product or process that is to be used internally or offered for commercial purposes.

2. Elimination of uncertainty: There must be a clear goal to eliminate uncertainty about the design, methodology, or capability of developing or improving a product or process.

3. Process of experimentation: The activity must involve a process of evaluating alternatives to achieving the desired outcome. Examples might include ongoing testing, simulation, modeling, or trial and error.

4. Technological in nature: It must rely on principles of science, such as biology, chemistry, engineering, agricultural or food sciences, or computer sciences.

In the context of wineries and vineyards, qualifying activities might include:

• Viticultural innovation: Developing new trellis systems or grafting rootstock to create plants with faster maturation or better disease resistance. Techniques to optimize plant exposure to sunlight for higher-quality grape growth also qualify.

• Process automation: Experimenting with equipment to automate sorting, fermenting, and filtering wine.

• Software development: Developing new software to track vineyard history, grape varietals, and planting schedules.

• Sustainability and efficiency: Improving soil nutrient management, pest and disease control, and irrigation systems. For example, testing frost protection methods that also preserve moisture can meet the experimentation requirement.

Activities That Do NOT Qualify

While blending wine for taste is a critical part of winemaking, the IRS excludes activities solely aimed at improving taste due to its subjective nature. However, efforts to extend shelf life or improve functionality — such as filtration techniques or packaging trials — may qualify.

Other activities that automatically exclude a project from qualification include:

• Funded research

• Research conducted after the launch of commercial production

• Research conducted outside of the U.S.

• Research in economics, behavioral sciences, arts, and management

Why The R&D Credit Matters for Vineyards and Wineries

The wine industry is highly competitive, with thousands of wineries vying for consumer attention. R&D credits can help your business conserve cash that you can reinvest into operations, helping your business stay competitive.

For smaller operations, this incentive can be transformative. Like many growers and vintners, you may underestimate the scientific nature of your work, viewing it as traditional or routine. Yet agricultural and food sciences often underpin your practices.

Tips for Claiming the R&D Credit

To successfully claim the R&D credit, you need thorough documentation for your qualifying activities. Here are a few tips for maintaining the right documentation and reducing audit risks:

1. Document every experiment: Keep detailed records, including project descriptions or plans, trial designs, test logs and reports, chemical analyses, notes, presentations, and emails.

2. Track material consumption: If you use fruit or other components during testing, log these separately from production batches. Many wineries fail to track material consumption, particularly in the bottling stage.

3. Identify eligible personnel: Consider employee roles, titles, and compensation. W-2 wages are simpler to claim, but payments to contractors can also qualify if appropriately documented.

4. Separate personal preferences from science: Blending for taste and other subjective improvements does not qualify. Focus on activities that meet the technological nature and process of experimentation criteria. Clearly differentiate taste-testing activities from experiments focused on functionality or improvement.

How MGO Can Help

MGO’s Vineyard and Wineries team understands the nuances of claiming the R&D credit in this industry. Our advisors provide tailored strategies to identify qualifying activities, document experimentation, and prepare claims that can withstand IRS scrutiny.

Whether you’re developing innovative processes, testing new agricultural techniques, or implementing sustainable practices, we can help you capture the R&D credit to improve your cash flow.

Reach out to our team today to learn how MGO can help your vineyard or winery thrive through innovative tax strategies.

The post Unlocking Research and Development Tax Credits for Your Vineyard or Winery appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Leverage federal tax credits like the ITC and PTC to reduce costs and drive innovation in renewable energy.
• Increase savings by incorporating accelerated depreciation and R&D tax credits into your green tech strategy.
• Public and private green tech companies can reinvest tax savings to power growth and advance sustainability goals for long-term success.

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As global demand for renewable energy continues to surge, both public and private green tech companies are positioned to capitalize on significant tax savings through a variety of government incentives. Navigating this landscape of tax incentives, credits, and deductions can help your company reduce capital costs, enhance long-term profitability, and fuel sustainable innovation. However, you need to understand the complexities involved in these programs to make the most of the available benefits.

To help your company unlock the full potential of these opportunities, here’s a closer look at key tax incentives available to green tech businesses — and how they can drive both immediate and long-term value.

1. Investment Tax Credit (ITC)

One of the most powerful tools available to green tech businesses is the Investment Tax Credit (ITC). If your company invests in renewable energy systems, such as solar or wind, you can claim a percentage of the investment as a direct tax credit. The ITC currently provides a base credit ranging from 6% to 30%, with the potential for significant increases up to 70% through stackable incentives and bonus credits for qualifying low-income community projects. This makes the ITC a critical tax-saving tool for large-scale renewable energy projects.

Public companies can use ITC savings to improve financial performance and fund future initiatives, while private companies can reinvest these tax savings into growth or expanding renewable energy infrastructure. Whether you are a public or private company, working with an accounting firm that specializes in green tech companies can help you manage the compliance and reporting needed to fully capitalize on the ITC.

2. Production Tax Credit (PTC)

Another key incentive is the Production Tax Credit (PTC), which provides a per-kilowatt-hour credit for energy generated from renewable sources like wind, geothermal, or biomass, that is sold to an unrelated person. This credit, available for the first 10 years of a project’s operation, can be particularly helpful for companies with long-term renewable energy investments.

For corporate renewable energy accounting, tracking energy production accurately is crucial to maximizing the PTC’s benefits. Renewable energy accounting services can help your business with calculating and documenting eligible production levels to maximize your credits.

3. Accelerated Depreciation for Renewable Energy Projects (MACRS)

The Modified Accelerated Cost Recovery System (MACRS) allows green tech companies to recover the costs of qualified renewable energy investments through accelerated depreciation. Under MACRS, companies can depreciate renewable energy systems over a shortened five-year period, resulting in substantial early tax deductions.

If you are a public company, integrating MACRS into your financial strategy can boost short-term profitability and improve shareholder value. If you are a private company, accelerated depreciation offers cash flow benefits that can be reinvested into further sustainable development. Green tech consulting services can help in structuring depreciation schedules to capture maximum tax savings while keeping compliance with IRS rules.

4. Research and Development (R&D) Tax Credits

Innovation is at the core of the green tech industry, and the R&D tax credit is a valuable tool for companies investing in new technologies and products aimed at enhancing renewable energy efficiency or sustainability. Both public and private companies involved in research and development activities that reduce greenhouse gas emissions or improve renewable energy systems may qualify for this credit.

By working with renewable energy consulting firms and tax professionals, your company can find eligible R&D activities, track related expenses, and apply for significant credits. This is particularly important for public companies, as maximizing R&D credits can improve financial performance and contribute to a narrative of innovation and environmental leadership for shareholders.

5. State and Local Tax Incentives

In addition to federal incentives, many states offer their own tax credits and deductions for renewable energy projects. These can include sales tax exemptions, property tax abatements, or other state-level production or investment tax credits. These incentives vary widely depending on the state, so it’s crucial for your green tech company to work with state and local tax professionals who can help you find and apply for these benefits.

For private companies looking to expand renewable energy operations domestically, state incentives can offset upfront costs. Public companies can incorporate these state-level savings into their overall tax strategy to further enhance profitability and provide value to shareholders.

Strategic Reinvestment and Corporate Value Creation

For both public and private companies, reinvesting tax savings from renewable energy incentives can provide a significant strategic advantage.

Public companies can use these savings to fuel long-term growth by funding additional clean energy projects or enhancing operational efficiencies, improving overall financial performance. Private companies, especially those in growth phases, can leverage tax credits and deductions to free up capital for further investments in renewable energy infrastructure, research, and technology. For smaller green tech firms or startups, these incentives can provide an early-stage financial boost that supports scaling and expansion.

Turn Tax Savings into Growth for Your Green Tech Business

From the ITC and PTC to state-level credits and accelerated depreciation, your green tech company can use a range of tax incentives to boost financial performance and support sustainable growth. By working with an accounting firm that specializes in green tech, your business can unlock the full value of these opportunities and reinvest in clean energy innovation.

How MGO Can Help

With deep knowledge of the green technology industry and a dedicated Credits and Incentives team, we can help you leverage valuable tax benefits like the ITC, PTC, and state-level incentives — turning tax expenses into opportunities for growth. Let us help you power your growth and fuel the future of sustainable technology. Reach out to our team today to learn how we can support your journey toward profitability and lasting impact.

The post Unlocking Tax Incentives, Credits, and Deductions for Your Green Tech Company appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Many businesses may miss out on significant savings by not fully using state and local tax (SALT) credits and incentives. But there are thousands available across state and local jurisdictions.
• SALT programs offer valuable credits for job creation, capital investment, and research and development (R&D) — but companies often struggle with awareness, eligibility, and administrative challenges in utilizing these programs.
• Third-party advisors can help businesses identify and maximize SALT savings while maintaining compliance. Properly leveraging SALT credits can provide a strong return on investment.

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State and local tax (SALT) credits and incentives programs continue to be underutilized by taxpayers. Despite the substantial value they can add for businesses, BDO’s 2024 CFO Outlook Survey found that just 34% of CFOs plan to optimize costs by claiming tax credits in the next 12 months. This suggests that many companies could be leaving significant savings on the table.

There are myriad reasons why businesses do not take full advantage of SALT credits and incentives, even though those programs can be instrumental in unlocking cost savings for business activities such as upgrading existing facilities, relocating, building new facilities, and research and development (R&D).

There are thousands of credits and incentives available across state and local jurisdictions. Some companies lack awareness of the full range of credits and incentives available to them, while others may be aware of the programs but unsure of how to take advantage of them. The administrative burden of fully implementing awards once obtained can also be a barrier.

The benefits of tax credits and incentives can be a strong return on investment for companies able to take advantage of them, but many businesses lack the internal resources or expertise to navigate these opportunities effectively. This is where engaging with a third-party advisor may be a strategic value-adding measure.

Tax Credits and Incentives Refresher

Statutory tax credits can reduce a company’s overall tax liability — or in some cases provide a cash benefit for refundable or transferable credits — and may be available retroactively if applications are supported with appropriate documentation. Examples include statutory income/franchise tax credits and unique sales tax exemptions.

Tax incentives are generally broader than tax statutory credits and can come in the form of discretionary cash grants, negotiated abatements, unique exemptions and exclusions, and preferential tax rates. In many cases, they can offer above-the-line savings, making them appealing even to businesses operating at a tax loss. Examples include payroll tax rebates or property tax abatements.

Common SALT Credits and Incentives

The thousands of SALT credits and incentives available in the U.S. can vary widely, but some of their themes are consistent across jurisdictions. Below are a few of the most common SALT programs that are relevant to a large range of businesses.

Job Creation

Many jurisdictions offer credit and incentive programs to promote job creation. The most effective and typical incentive is a rebate of a portion or all of future payroll/withholding taxes for new jobs created for an expansion project. This type of incentive is highly lucrative because it is generally in place for at least 10 years. Negotiated incentives to reward job creation can generally be found in most states, but the Southeast continues to offer some of the best incentives.

Capital Investment

Capital investment incentive programs are designed to boost local economic development by supporting projects such as constructing new facilities, acquiring production equipment, or upgrading existing facilities. For example, an energy company that commits to a large-scale project to purchase a new piece of equipment may be eligible for income tax credits to offset a percentage of its investment costs. Other common opportunities include real and personal property tax abatements for new or improved facilities and investing in new equipment.  

Utilities

As businesses across industries look to reduce their environmental impact, they might want to consider projects that may be eligible for credits and incentives, such as upgrading utility infrastructure, implementing energy-efficient systems, and enhancing water conservation. Across the nation, several jurisdictions offer utility tax credits, energy efficiency grants, renewable energy tax incentives, and utility rate reductions. These initiatives are often not limited to specific industries and can even be available to large nonprofit organizations such as hospitals, which may be eligible for a utility rate reduction without having to make any new investments.

Research and Development

States and jurisdictions across the country are vying to attract innovation by offering a variety of R&D credits to businesses in all industries. These programs can offset the cost of developing new products and processes, testing new or improved products and processes, enhancing existing products and processes, and creating prototypes. For example, an auto manufacturer seeking to develop longer-lasting batteries for electric vehicles may be eligible for credits or incentives to support researching or prototyping a new battery.

Benefits of Working with an Advisor

Lack of awareness of or a failure to understand eligibility are two of the most common reasons businesses miss out on available SALT credits and incentives programs. Many companies do not have in-house expertise to uncover these savings opportunities, but third-party advisors have the skills, relationships, and experience necessary to conduct the planning and analysis needed to determine which credits and incentives businesses should pursue.

1. Advisors can help tax leaders review their companies’ profiles and business strategies to uncover any past, current, or future opportunities. For example, a review of prior income tax returns could result in identifying retroactive refund opportunities.

2. Advisors can also review the programs offered by the various jurisdictions where the company operates, which, depending on the company’s size and scope, could represent savings opportunities in dozens of locations.

3. Advisors can take a comprehensive approach to reviewing all available opportunities or can tailor credit reviews to the most pertinent and strategic business needs.

4.  They can also help leaders stay abreast of new credits in the locations where they operate and identify incentives and explore eligibility as they expand operations. 

5. Further, advisors are critical in helping businesses collect the extensive documentation required to qualify for, take advantage of, and report their use of credits and incentives programs. This compliance work can be challenging for a company’s in-house tax team to navigate, so outsourcing it can provide valuable time savings. It can also help ensure companies are taking full advantage of their awards.

How MGO Can Help

As a third-party advisor, we uncover credits and incentives applicable to your business profile and strategy, particularly in areas where you plan to operate or expand. Staying at the forefront of new incentives and programs, our team helps you benefit from the latest opportunities — matching your needs to available programs at the federal, state, and local levels. We work with both statutory and non-statutory programs, collaborating closely with relevant authorities.

SALT credits and incentives are a critical component of tax planning and should be explored to determine how they can support your overall business strategy or create opportunities for retroactive or above-the-line savings. To learn more, reach out to our team today.

Written by Tim Schram. Copyright © 2024 BDO USA, P.C. All rights reserved. www.bdo.com

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