Numerous federal tax credits exist for a myriad of situations that may be beneficial to your business. Our firm can analyze your company=s records to learn which of these tax credits may be appropriate for your business.

1. High tech firms may profit from Research and Development (R&D) credits which could equal the sum of 20%
of the excess of qualified research expenses and 20% of the university basic research payments.

2. The Rehabilitation Investment credit is 20% of qualified rehabilitation expenses (QRE) for certified historic structures and 10% for QRE for qualified rehabilitated buildings first placed in service prior to 1936.

3. A Work Opportunity Tax credit may be available to employers who hire from targeted groups. The credit is taken for first-year wages paid to eligible individuals who began work after 9/30/96 and before 7/1/99. This credit is equal to 35% (40% for individuals who began work after 9/30/97) of the first $6,000 in qualified first-year wages.

4. An eligible small business is entitled to a Disabled Access credit for expenditures incurred to make a business accessible to disabled individuals. The amount of credit is 50% of eligible access expenditures above $250, but not to exceed $10,250.

More federal credits exist for:

• energy investments
• electrical vehicles
• empowerment zone employment
• alcohol fuels and nonconventional fuel production
• Community Development Corporations
• FICA obligations of employer; gratuity income
• reforestation investments
• low income housing

North Carolina tax credits are also available to many uninformed NC corporate taxpayers.

1. Business Property Investment credit is 4.5% of the cost of business property (other than certain watercraft and luxury automobiles), up to $100,000 per year. The credit is not available on property expensed under Section 179 on the federal tax return.

2. Rehabilitation of Historic Structure credit for 25% of the federal credit for qualified rehabilitation expenses

3. Tax Credit for Creating Jobs is available for a business that has 5 or more employees and hires an additional full-time employee. The credit is based on the enterprise tier of the area in which the position is located.

4. Machinery & Equipment Investment credit is available generally to manufacturing, warehousing or distribution businesses. The credit is 7% of the excess of the eligible investment amount over the applicable distressed area threshold ($1 million in Catawba County).

Note: A business cannot take both the Business Property Investment Credit and the Machinery & Equipment Investment Credit.

Additional North Carolina tax credits exist for:

• housing for the handicapped
• cogenerating equipment
• construction of ethanol fuel distillery
• donations of real property
• conservation tillage equipment
• excise tax paid on NC produced wines
• solar hot water HVAC systems
• conversion to woodburning boilers
• alternative energy systems
• use of North Carolina ports
• gleaning of crops
• research and development
• worker training