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Tax Credits & Incentives

Marcum Research and Development Tax Credit (RDTC) Services

Our RDTC practice group has over 30 years of experience in applying the Research and Development (R&D) tax credit to a variety of industries, including high technology, software, manufacturing and service industries. We enhance our capabilities through an alliance with RD Tax Savers, who provide technical and engineering expertise.

Our Approach to RDTC Studies

Once the determination has been made that a business is eligible for the RDTC, we undertake a preliminary feasibility study. This preliminary study estimates the expected range of federal and state credits, along with the cost to produce the studies, to allow the business to make an appropriate cost benefit decision regarding whether to proceed with the Study.

As a client opts to proceed, we will initiate the Study by obtaining a more in-depth understanding of the client’s business and interviewing appropriate individuals who have been participants in various stages of the research and development. This will enable us to ascertain which projects and costs (known as Qualified Research Expenditures or QRE(s)) should be included in the calculation of the Credit. The results are summarized in an RDTC report which includes the information needed to obtain the federal and state credits through either a tax return or an application based upon state jurisdiction.

Marcum's professionals advise how to best track and capture the QRE(s). Our team will provide representation to support the amount of the credit in the event of an examination by a taxing authority.

Benefits include:

  • $1 for $1 Reduction on taxes owed or taxes paid
  • Additional future tax savings
  • Significant credits/ cash back from previous three years' returns
  • Credits that have not been claimed may be carried back one year and forward 20 years
  • Overall increase in company assets and value

Sample of Marcum RDTC Clients:

  • Manufacturing
  • Fabrication
  • Engineering firms
  • Chemical
  • Machine Shops
  • Software Development
  • Electronics
  • Biotechnology
  • Pharmaceutical
  • Professional Services
  • Apparel
  • Waste management
  • Veterinary Clinics
  • Banks, mortgage & titles companies
    (internally developed software)

Representative Engagement

Since its inception in 2002, a Telecom Manufacturing/ Software company had been designing and developing its products/technologies in support of its business plan. As they concluded fiscal 2011, they approached breakeven and were looking forward to the growth/ profitability curve accelerating into the future.

The company could find themselves in one of the following scenarios:

  1. Profitable, projected growth, and having used
    up their NOLs
  2. Approaching profitability, projected growth, and
    having not used up their NOLs
  3. Not profitable, projected growth, and still
    accumulating NOLs

The company found themselves' most closely aligned with scenario B which afforded their Marcum tax team the ability to go back to the 2002 inception and aggregate their Qualified Research Expenditures (QRE) for wages, computer rental costs, supplies used in research activity, and contract research costs. Marcum was able to both quantify the company's credit expectations and accounting fees for the three years of the engagement, which entailed amending their 2010 tax return, reflecting the cumulative QRE calculations back to 2002, and prospective credit filings for 2011 and 2012.

The total credits for this 3 year engagement approximated $500,000 dollars, which represented 6.5-10% of the QRE for the time period. Additionally, there are many states that will also refund R&D QRE dollars, albeit at a lower percentage, which also proved to be viable for this client.

TAX CREDITS & INCENTIVES UPDATES

Contacts
Philadelphia, PA
215.297.2230
Philadelphia, PA
484.270.2610
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Los Angeles, CA
310.432.7407
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New Haven, CT
203.781.9630
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Melville, NY
631.414.4532
Melville, NY
631.414.4770
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