Tax Preparation Service - Taxpayers who invest in qualifying business investments may be eligible to claim credits against their income and franchise taxes, with any unused credits carried forward up to 15 years. Businesses in North Carolina that incur research expenses may be eligible for a tax credit on eligible expenses, such as design, construction, installation of equipment and other expenses.
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The Work Opportunity Tax Credit (WOTC) is a federal tax credit designed to reward employers for hiring employees from specific targeted groups who face barriers to employment. This credit can save businesses millions in tax payments each year, helping their bottom lines flourish and boost revenue growth. HR should screen candidates before submitting a WOTC questionnaire to their State workforce agency for consideration within 28 days after starting employment.
Typically, this program aims to assist ex-felons, veterans, SSI recipients and high risk youth who find employment difficult to secure. Employers can utilize carryback/carryforward rules in this program in order to make the most of it.
The Work Opportunity Tax Credit has been extended by the Consolidated Appropriations Act of 2020 until 2025. However, its implementation is only just beginning and it is important that companies remain informed of any updates or changes to the program. It is important that companies retain all documentation for at least five years to maximize the potential benefits.
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Local governments frequently utilize discretionary grants as an economic development strategy tool. North Carolina offers a number of discretionary grant programs to help with this, including the Job Development Investment Grant and One North Carolina Fund.
The JDIG program is a discretionary, performance-based incentive that offers cash grants based on a percentage of the personal income tax withholdings for new jobs created. Investments of $500 million that create 1,750+ jobs may qualify for 100% of personal income taxes withheld for up 20 years.
These grants can be combined with other incentives from the county, state or workforce development to maximize their impact. Duke Energy offers an Economic Development Rider which gives qualifying companies discounted power rates for four years.
Statewide Business Link counselors can also offer businesses assistance with licensing, government contracting, business plans and financial information as well as marketing and sourcing capital. Not only can these counselors offer advice, they can connect business owners to experts throughout the state if needed.
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Credits may be applied against either corporate income tax or franchise tax liabilities of companies. Credits can be carried forward for up to 10 years.
C-corporations, S-corporations, partnerships, limited-liability companies, and any other pass-through entity are eligible to claim the credit in North Carolina. If taxed in another state, however, then this credit should be claimed on nonresident individual income tax returns submitted by its owners.
North Carolina provides businesses looking to expand or relocate with various incentives in exchange for jobs and investment, including multiyear grants based on projected personal income tax withholdings from new employees, as well as grants through its One North Carolina Fund.
North Carolina is a state that attracts business because of the many programs and incentives offered by each county. Each county can offer local investment and job incentive grants to further lower company costs; this county-specific support is one reason North Carolina has been consistently rated among the best states for doing business over time.
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Federal tax incentives have been a driving force behind the explosion in renewable energy projects such as wind, solar and bioenergy projects. Production Tax Credits (PTC) allow project owners to reduce their income tax liability based on electricity production, while Investment Tax Credits (ITC) help companies reduce their business taxes based on the capital invested.
Companies that manufacture renewable energy equipment, or who establish facilities in North Carolina, may be eligible for state tax incentives and credits. These can provide tax preparation service significant savings on qualifying systems. Both research and development tax credits combined offer substantial tax savings when applied towards qualifying systems.
Recent litigation against the NC Department of Revenue is raising questions over how state governments will treat companies that use federal tax credits such as ITC to offset their tax liabilities. A North Carolina business court judge recently sided with Farm Bureau Mutual Insurance Co. in their case against DOR, overturning an assessment by the state against Farm Bureau Mutual of nearly $24 Million related to investing in solar projects syndicated together through syndications - prompting other companies to take notice of its position on tax relief measures for solar energy investments.
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To remain competitive, you need to find new ways to improve operations, processes and profits. While larger manufacturers are aware of federal tax incentives like the Research and Development Tax Credit, smaller businesses may not be taking full advantage.
R&D credits can significantly lower a company's income or franchise tax liability on an equal dollar-for-dollar basis, and can be applied against either income or franchise taxes; any excess credit may be carried forward for up to 15 years.
Companies operating in North Carolina or having significant business presence here may qualify for the R&D credit, with qualifying expenses defined as any costs incurred for developing or improving products, processes or software. Qualifying businesses must also meet certain criteria, such as being technology-focused and having an excellent record under the Occupational Safety & Health Act.
This credit can be applied against up to 50% of state income or franchise tax liabilities, less any applicable credits against that tax, for eligible small businesses. Moreover, they can apply it to their alternative minimum tax (AMT).