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Form 6765 ND: What You Should Know
Provide Form 8865, in lieu of Form 6765 ; or B. provide information on Form 8885, Employee's Withholding Allowance Return, to the employee, or the employee's substitute in order to receive a Form 709 with a Form 8885 statement indicating the actual wage, bonus or other compensation for an employee. The new R&D tax credit procedures are effective on the first day of the annual filing season. 2017 R&D Tax Credit Tax law changes will increase the value or tax credit for most qualified R&D activity. In addition, some changes reduce the value or tax credit for those activities whose costs are substantially identical to those allowed under current law. Tax law changes could increase the value or tax credit from: New law reduces the amount to which the credit is refundable, which would result in most R&D tax credit items being refunded. The credit for qualified R&D activity is generally equal to the cost of the activity, multiplied by the percentage (determined in part by the number of employees) that the activity was substantially identical to an activity that received an average tax credit under current law and is carried on by the taxpayer as a trade or business for the taxable year. For qualifying expenses over certain threshold amounts, the amount determined as a percentage of the amount of qualified R&D activity is less than 50%. For businesses with fewer than 20 employees and whose qualifying expenses do not exceed certain threshold amounts, the amount of the tax credit is determined by the amount of the aggregate amount of the expenses. For those individuals, a simplified method (which is not the same as calculating the average tax credit) is used. New law reduces the amount that the credit is not refundable, which will result in the credit for a large percentage of R&D activities not being refundable. The credit for a qualified R&D activity is determined as follows: The amount of the credit is limited to 100 percent of the tax of the qualifying activity that had an average tax credit under the current law for the taxable year. The credit of 100 percent of the tax of the qualified activity that had an average tax credit under the current law is limited to the excess of the Federal income tax credit over the credits allowed under the current law. The following table shows the limits for each percent of average tax credit: A. 10.8 percent B.
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