The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
On Friday, 12/17/10, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. Among a myriad of tax provisions, the Federal Research and Development Tax Credit was retroactively extended yet again (for the fourteenth time), through 12/31/11. You can download a copy of H.R. 4853 here, but this is what it had to say about the R&D Credit:
TITLE VII—TEMPORARY EXTENSION OF CERTAIN EXPIRING PROVISIONS
Subtitle C—Business Tax Relief
SEC. 731. RESEARCH CREDIT.
(a) IN GENERAL.—Subparagraph (B) of section 41(h)(1) is amended by striking ‘‘December 31, 2009’’ and inserting ‘‘December 31, 2011’’.
(b) CONFORMING AMENDMENT.—Subparagraph (D) of section 45C(b)(1) is amended by striking ‘‘December 31, 2009’’ and inserting ‘‘December 31, 2011’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to amounts paid or incurred after December 31, 2009.
This extension, coupled with the elimination of the AMT restriction on business credits for 2010 (see the Small Business Jobs Act of 2010), makes 2010 a very good year for US Manufacturers to claim the Research Credit. Unfortunately, the current Administration was unable to pass an increase of the Alternative Simplified Credit to the anticipated 17% level, nor was the Credit made permanent, as expected.
With this extension, the R&D Credit survives yet another cycle, and will most likely be a hot topic in the presidental election debates in 2012.
