Congress Extends the R&D Tax Credit and Several Hiring & Location Tax Incentives in Tax Relief Act of 2010

Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

Implications for the R&D Tax Credit and Hiring & Location Incentives

Today, President Obama signed into law the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” (“ACT”). The ACT contains several tax provisions that are pertinent to our clients and prospects.

Although we do not have the final ACT to review, here’s a list of provisions that are important that we know are included:

• The R&D Tax Credit (Research Tax Credit) extended for 2 years: 2010 and 2011;
• The Work Opportunity Tax Credit (WOTC) extended through the end of 2011;
• The Indian Tax Credit extended for 2 years: 2010 and 2011;
• The Empowerment Zone Tax Incentives extended for 2 years: 2010 and 2011.

Paradigm will be releasing an update once we have had the opportunity to go through the entire ACT that was finally passed.

Many of our clients and prospects have been hesitant to move forward with their R&D Tax Credit studies until the R&D Tax Credit was extended. Now that it has been extended, they will be able to take advantage of the credit by reducing their tax liabilities and stabilize their planned hiring for 2010 and 2011.

If you have any questions about the ACT, please contact Karim Solanji at 281-558-7100 X-109 or email Karim at KSolanji@ParadigmLP.com.