Marcum LLP
Tax & Business

Tax Credits & Incentives

Watch and Money

It is a proven fact that more than 50% of credits and incentives go unclaimed annually. Marcum wants to ensure that these opportunities are never missed. Our professionals have extensive experience identifying and securing credits and incentives in every industry segment.

Marcum's Tax Credits and Incentives Services practice can help your business reduce costs, generate refunds and provide the advice to unlock and secure favorable incentives packages. We can help identify tax and non-tax savings opportunities for job creation, research, training and other qualified expenditures.

Busy companies can overlook non-traditional methods to reduce costs. When operations and the general business climate run at lower levels, opportunities present themselves to utilize tax incentives that impact the bottom line by:

  • Avoiding paying unnecessary taxes.
  • Obtaining immediate tax refunds.
  • Reducing operational costs.
  • Improving earnings before interest and tax, net income and shareholder value.
  • Enhancing the economic value of company initiatives.
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Tax Credits & Incentives by State


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The Research & Development Tax Credit

As the CFO or top financial executive, you are called upon daily to effectively manage the use of capital by your organization. An often over looked idea that can provide an enormous benefit to your company is the research and development tax credit. This credit reduces current taxes and secures a refund of previously paid taxes, providing more cash to invest in your business.

At Marcum LLP, we are specialists who investigate Research and Development Tax Credits. Many organizations claim less benefit than they are entitled to or, even worse, believe that they do not qualify because their main business is not research and development. In addition, many states have enacted generous credit programs, some of which are refundable even if you have not paid taxes. Why miss out?

The Opportunity

Over the past few years, legislative changes ave expanded the opportunity for many industries to qualify and claim the research credit. Through the research credit, many state and federal governments are providing subsidies for your investment in a product or a process to remain competitive.

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What Type of Activities Qualify?
  • Investing in resources for new products or for improving products.
  • Investing to develop new or improved manufacturing or service processes.
  • Attempting to improve manufacturing efficiency, reduce scrap and implement techniques such as "Lean", "Green" and "Kan-Ban."
  • Have Existing or Patents Pending.
How Can the Credit Benefit Your Company?
  • Can provide a source of capital through significant cash refunds of previously paid federal and state taxes. Can reduce your current tax expense, freeing up capital for investment in business, product development and reduction of debt.
  • Will make your business more valuable to potential investors or acquirers.
  • Alternative Minimum Tax (AMT) relief - $50 million and under ( average sales).
  • Payroll tax expense refund/reduction.
  • State governments have enacted generous credit programs to attract world class businesses. Many of these state credits are refundable regardless of whether taxes were paid or not. Additionally, some allow their credits to be sold.
R&D Credits Available in Marcum Office Regions*

*States have unique qualifying limitations.

R&D Tax Cedit Success Stories

Construction Services

  • $1B Construction Management – Saved over $1.0 million
  • $200M Construction Services – Saved over $200,000
  • $40M Mechanical Contractor – Saved over $60,000

Consumer Products and General Manufacturing

  • $75M Food manufacturing company – Saved over $700,000
  • $50M Bakery – Saved over $150,000
  • $15M Specialty game manufacturing – Saved over $75,000
  • $35M Consumer product design firm – Saved over $350,000

Architecture, Design & Engineering Service Firms

  • $400M Architectural service firm – Saved over $400,000
  • $75M Engineering service firm – Saved over $1.2M

Financial Services

  • $75M Bank – Saved over $150,000
  • $400M Financial services firm – Saved over $750,000
  • $150M Specialty service bank – Saved over $200,000

Pharmaceutical and Life Sciences

  • $30M Nutraceutical development and manufacturing company –Saved over $125,000
  • Start up Pharma company – Saved over $200,000
  • Start up in Pharma basic research – Saved over $300,000 in refundable state of NY Qualified Emerging

Technology Credits

  • $10M Biomedical device manufacturer – Saved over $700,000

Software Development

  • $12M software content designer and developer - Saved over $1.5M
  • $25M software content designer – Saved over $350,000
  • $75M specialty software content developer – Saved over $1.2M
  • VC backed software content developer – Saved over $500,000
Payroll-Based Tax Credits

Every tax year, hundreds of millions of dollars are unclaimed by taxpayers from the U.S. Treasury, for specific "payroll-based" tax credits. These tax credits are available to all U.S. taxpayers that have employees who are paid via Form W2.

Work Opportunity Credit ("WOTC")

The Work Opportunity Tax Credit ("WOTC") is a payroll-based tax credit that is often overlooked. The process to claim the tax credit can be burdensome. To claim the WOTC, the taxpayer must hire a qualified employee from one of 10 target groups, and specific forms must be filed with the state's WOTC Coordinator within 28 days from date of hire. The credit amount can range from $2,400-$9,600/employee depending upon which target group the qualified employee is part of. Marcum's Tax Credit and Incentives Group provides all WOTC processing, vouchering and management to capture the credits. The TCI Group utilizes MarcumSecure, the Firm's encrypted information transfer system which ensures that data sent between Marcum and its clients is secure.

Example of WOTC Savings:

  • Total New WOTC Hires: 10
  • Total Average WOTC Credit Per Year: $2,400
  • Total Current Year Tax Credit: $24,000
 
Federal Empowerment Zone Tax Credit ("FEZ")

The Federal Empowerment Zone ("FEZ") Tax Credit was created in 1996 by the Clinton Administration. There are 40 federal Empowerment Zones located within the U.S. The FEZ credit has a history of expiring, retroactively being extended and extended again. Most recently, the FEZ expired on December 31, 2016 and is still awaiting extension. The FEZ was typically included in Congress's tax extender legislation in previous years. The Trump Administration has made no public comment on its view of the FEZ. There are amended return opportunities that may exist for the 2013-2016 tax years. The credit amount is equal to 20% of the first $15,000 in wages paid, being capped at $3,000 per employee, per year. The employer and employee must reside within the Empowerment Zone and the employee must work in the FEZ. Exempt businesses such as golf courses, gaming venues, and liquor stores are not eligible for this tax credit. Marcum's TCI group can determine whether your business is in the FEZ and estimate what your refund potential might be. Marcum's TCI group manages the entire process to capture all qualified tax credits for you and your business.

Example of FEZ Refunds:

  • Total Employees in FEZ: 150
  • Qualified FEZ Employees: 15
  • Tax Credit Per Employee: $3,000
  • Total Tax Credits Claimed Per Year: $45,000
  • Total Credits per All Qualified Amended Returns: $135,000

TAX REFORM INSIGHTS

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Contacts

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William  Kuhlman, R&D Tax Credits Leader, Tax & Business
Practice Leader
R&D Tax Credits Leader
Tax & Business
Philadelphia, PA
PA

Mark  Agulnik, Partner, IT Risk and Assurance
Partner
IT Risk and Assurance
Fort Lauderdale, FL
FL

Peter  Downing, National Principal-in-Charge, Tax Credits and Incentives, Tax & Business
National Principal-in-Charge
Tax Credits and Incentives
Tax & Business
Costa Mesa, CA
CA

John  Eckweiler, Partner-in-Charge, Tax Services -  California, Tax & Business
Partner-in-Charge
Tax Services - California
Tax & Business
Costa Mesa, CA
CA

Barry  Fischman, Partner, Tax & Business
Partner
Tax & Business
New Haven, CT
CT

Diane  Giordano, Partner, Tax & Business
Partner
Tax & Business
Melville, NY
NY

 
James  Lundy, Partner, Tax & Business
Partner
Tax & Business
Nashville, TN
TN

Gary  Rose, Partner-in-Charge, Tax Services -  Illinois, Tax & Business
Partner-in-Charge
Tax Services - Illinois
Tax & Business
Deerfield, IL
IL

Jill  Scher, Director, Tax & Business
Director
Tax & Business
Melville, NY
NY

Jeffrey  Winkleman, Partner-in-Charge, Corporate Taxation, Tax & Business
Partner-in-Charge
Corporate Taxation
Tax & Business
Philadelphia, PA
PA

 
 
2018 YEAR-END TAX GUIDE

The Marcum 2018 Year-End Tax Guide continues our tradition of providing timely tax guidance for the upcoming year.

 
 
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