President Obama’s 2013 Budget Proposal outlines changes to the R&D Tax Credit, adds a new job creation incentive, and introduces the “Buffet Rule.”

American Innovation and Manufacturing

• $140.8 billion for R&D overall; increase the level of investment in non-defense R&D by 5 percent from the 2012 level, even as overall budgets decline; maintains the President’s commitment to double the budgets of three key basic research agencies (National Science Foundation, Department of Energy’s Office of Science, and National Institute of Standards and Technology Laboratories); expands (enhances)  and makes permanent the R&D Tax Credit.

Jumpstart Job Creation

• A new tax credit for this year focused on small businesses and that gives businesses that add jobs and wages a tax cut equal to 10 percent of wages added up to $500,000.

The “Buffet Rule”

• The budget characterizes the “Buffet Rule” as: “No household making over $1 million annually should pay a smaller share of its income in taxes than middle class families pay.”. Its name derives from Warren Buffet’s observation that his effective tax rate is lower than his secretary’s.

• The budget proposes that those making more than $1 million should pay at least 30% of their income in tax. The budget’s introduction says that “[t]he Administration will work to ensure that this rule is implemented in a way that is equitable, including not disadvantaging individuals who make large charitable contributions” (id.), but no specifics are provided.

• The president is proposing that this “Buffet Rule” replace the current AMT.

Summary

Our hope is that these incentives remain part of the budget when passed. From an R&D Tax Credit perspective, our clients will be able add staff with the knowledge that the credit is permanent.

The enhancements to the credit will provide additional funds for R&D to our clients and the “Buffet Rule” could open up the credit to tens of thousands of small to medium size businesses. Today, many owners of SMBs are paying AMT and so have been unable to take advantage of the credit because the credit could not reduce AMT.

Lastly, the new credit “Jumpstart Job Creation” will assist our Hiring & Location Incentive clients to add new staff and help increase employment for the country.

On November 21, 2011, the President signed into law two new tax credits:

• The Returning Heroes Tax Credit is a new hiring tax credit that will provide an incentive for businesses to hire unemployed veterans.
• Short-term unemployed: A new credit of 40 percent of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been unemployed at least 4 weeks.
• Long-term unemployed: A new credit of 40 percent of the first $14,000 of wages (up to $5,600) for employers who hire veterans who have been unemployed longer than 6 months.
• The Wounded Warrior Tax Credit will double the existing tax credit for long-term unemployed veterans with service-connected disabilities.
• Maintain the existing Work Opportunity Tax Credit for veterans with service-connected disabilities (currently the maximum is $4,800).
• A new credit of 40 percent of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service-connected disabilities who have been unemployed longer than 6 months.

This is the latest of a series of executive actions to help get veterans back to work. Paradigm’s Hiring & Location Incentives Division will be working closely with clients to take full advantage of this incentive and help our veterans find new employment… find out more

Paradigm Partners Recognized as the 14th Fastest Growing Company in Houston

Paradigm Partners Makes the Houston Business Journal’s 2011 Houston Fast 100 List – Recognized as the 14th Fastest Growing Company in Houston

Houston, TX, Oct. 3, 2011 (GLOBE NEWSWIRE) — Paradigm Partners, a leading international tax and cost recovery firm, has been named as the 14th Fastest Growing Company on the Houston Business Journal’s 2011 Fast 100 List. This honor is bestowed upon companies with the highest percentage of revenue growth in the Houston area.

In a letter about the Fast 100 List, John Beddow, the Publisher of the Houston Business Journal writes “The businesses on HBJ’s 2011 Fast 100 list represent dedication, innovation and risk taking. Despite economic uncertainty, these businesses have proven themselves through stellar growth over the past few years.” The Houston Fast 100 List is ranked by two-year growth and is open to any private company in the 10-county Houston Metropolitan area and that has been in business for a minimum of 5 years.

Proudly located in Houston, TX, Paradigm Partners was also recently recognized on Inc. Magazine’s 2011 Annual List of America’s Fastest-Growing Private Companies – The Inc. 500, where they achieved a No. 37 distinction in the nationally-tracked Business Products and Services category and a ranking of No. 9 in Houston, TX.

Saqib Dhanani, co-founder of Paradigm Partners, commented that “Paradigm Partners is honored to be recognized by the Houston Business Journal for its outstanding growth. We are particularly proud of this hard-earned achievement during the recent economic downturn. We congratulate our fellow Fast 100 winners for helping to maintain Houston as a thriving business hub.”

“We wish to recognize our clients and thank them for their continued loyalty and support that served as a driving force behind our fast and steady growth. This award validates our strategy of maintaining focus on our core business while looking for and taking advantage of new opportunities as they arise” said Executive Vice President of Business Development, Brian Cameron.

Paradigm Partners is a professional tax services firm that provides R&D Tax Credit, Hiring and Location Incentives (WOTC, HUD, etc.), Cost Segregation, and IC-DISC services to manufacturing and retail clients in the U.S. and Canada. Paradigm Partners’ staff includes some of the industry’s most experienced attorneys, engineers, software developers, and audit experts.

CONTACT: Brian Cameron at 281-558-7100 or email at BCameron@ParadigmLP.com for additional information about Paradigm Partners.

About the Houston Business Journal’s 2011 Houston Fast 100 List

The businesses on HBJ’s 2011 Fast 100 list represent dedication, innovation and risk taking. Despite economic uncertainty, these businesses have proven themselves through stellar growth over the past few years. The Houston Fast 100 is ranked by two-year growth. All of the companies on the list are headquartered within the 10-county Houston metropolitan area and have been doing business for a minimum of five years. Nominations to be on the Fast 100 list opened on June 13, and any private firm in the Houston area was invited to participate.

CONTACT: Paradigm Partners, Houston, TX
         Brian Cameron, EVP Business Development
         281-558-7100 X-118
         BCameron@ParadigmLP.com

Click Here to Read the Press Release