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How Taxpayers With Losses Can Monetize the Research and Development Tax Credit

Dec 19, 2018

Taxpayers with years of net operating losses (NOLs) typically believe they cannot monetize the federal Research and Experimentation Tax Credit (R&D Credit). Many of these taxpayers pass on claiming the credits in loss years in order to minimize costs associated with documenting and capturing the qualified research expenditures (QREs) — only to find that once these NOLs are exhausted, the credit could have provided additional benefit by reducing tax liabilities.

The R&D Credit is a general business credit that can be carried forward 20 years and provide dollar-for-dollar tax savings. Taxpayers who are in this situation should know that not all is lost, as there are provisions that allow them to go back, even beyond the statute of limitations, to compute the appropriate credits for use in current and future years.

Wipfli has worked with many clients to calculate this benefit and navigate the complexities of the tax law to capture this seemingly lost benefit. There are elections and steps a taxpayer can take during these loss years to increase benefit and reduce compliance burden. Contact Wipfli today to learn if you can benefit from these provisions.


Nathan J. Henrigillis, CPA, MST, MPA
Partner, Tax
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