Tax Credits & Incentives Advisory Services
As a key benefit to growing businesses, Cherry Bekaert can provide support for your organization’s tax credits and incentives requirements.
Cherry Bekaert’s Tax Credits & Incentives Advisory (“TCIA”) practice helps our clients with many cost-saving activities that can help increase cashflow and improve their tax position, through vehicles such as:
- Research and Development (“R&D”) Activities
Designing or developing new or improved products, processes, or software designs.
- Construction of New Buildings
- Investments in Low Income Communities
- Alternative Energy Investments
Research & Development Tax Credit
(also known as the IRC Section 41 Credit for Increasing Research Activities)
- Calculations are required to consider the activities and costs of the entire U.S. controlled group
- Dollar-for-Dollar reduction in tax liability
- Incremental credit requiring a review of current year qualified research expenses (“QREs”) as well as prior year activities
- Start-up companies can offset up to $250,000 of payroll taxes
- Provide a cash benefit that can be used to hire new staff or buy machinery and other assets to support a continued growth.
Cost Segregation Plus Services
Conducting a cost segregation analysis can help your organization implement a tax planning strategy that could accelerate substantial depreciation deductions, reduce tax liability, and deferral of tax payments.
- Accelerate depreciation
- Increase cashflow
- Opportunity to claim catch-up depreciation from previously misclassified assets
- Reduce of real estate property taxes
- Substantial reduction in tax liabilities
Employee Retention Credits (“ERC”)
Employers can be entitled to payroll tax refunds in excess of payroll taxes paid in 2020 and 2021.
Eligible Employers for the credits include those that have either:
- Experienced a significant decline in gross receipts in the calendar quarters of 2020 and 2021 as compared to those same calendar quarters in 2019
- Were directly disrupted by COVID-19 government orders limiting commerce, travel, or group meetings in 2020 and 2021
Energy Tax Credit & Incentives
If your business participates in energy savings activities (e.g., utilizing energy-efficient technologies, LEED® certification, etc.) or renewable energy, you may be eligible for federal, state or local energy tax credits and incentives including:
- Accelerate depreciation for alternative energy and biomass properties
- Investment tax credits for qualified energy property (e.g., solar, fuel cell, small wind energy property, geothermal, micro-turbine, etc.)
- IRC Section 45L tax credits for contractors for building energy efficient homes
- IRC Section 179D allows:
- Deduction for owners of energy-efficient commercial buildings
- Deduction allocated to designers of energy-efficient governmental facilities and public-school buildings
- Energy grants for renewable energy producers and for manufacturers of products used to produce renewable energy
Fixed Asset Services
The complexity of tracking depreciation in the context of tax law changes, merger and acquisition (“M&A”) activities and enterprise resource planning (“ERP”) system integration requires a defined strategy. Our team is able to take that burden off your employees and handle these challenging issues.
- Assess the appropriate fixed asset basis for global intangible low-taxed income (“GILTI”) and foreign-derived intangible income (“FDII”) calculations
- Evaluate the interaction with interest expense deduction limitations
- Review of the entire fixed asset portfolio to consider accounting method changes
New Markets Tax Credits
New Markets Tax Credits (“NMTC”) are federal tax credits used to fund expansion projects or spur private capital investment in low-income communities. NMTC provides substantial benefits to companies pursuing a capital expansion where jobs are being added.
This credit can provide gap financing to fund the final 20%-25% of the project’s capital needs and be received in the form of a loan that can be canceled after seven years The TAG by Cherry Bekaert team has successfully closed more than $877 million of NMTC transactions—demonstrating our broad range of project experience including community facilities, manufacturing and distribution facilities, and mixed-use real estate investments.
NMTC Services include:
- Assess the project feasibility
- Secure NMTC financing from community development entities (“CDEs”) and investors
- Lead the project closing process
- Capital deployment and management
- NMTC allocation application support
- Federal Historic Rehabilitation Tax Credit (“HTC”)
Let Us Guide You Forward
Cherry Bekaert’s Tax Credit & Incentives Advisory practice’s mission is to identify, calculate, and document incentives specific to U.S.-based activities for which the tax code has provided cashflow and permanent tax benefits for our U.S. businesses. Our TCIA practice has a dedicated national team made up of more than 50 tax professionals, who are solely focused on keeping up with the latest federal tax credits, state tax credits, and incentive programs that best benefit our clients’ organization and business goals.