Issue link: http://palletcentral.uberflip.com/i/921113
palletcentral.com PalletCentral • November-December 2017 35 grading or sorting software, or other pallet design technology, may qualify for the R&D tax credit. Some examples of wood packaging industry activities that may qualify for the R&D tax credit include: • Designing or developing new or improved process • Testing product design requirements and specifications • Designing and developing processes to reduce costs or improve performance • Developing processes or technology to reduce costs and product damage • Developing technology, software or mobile applications for research and development • Developing product specification software • Developing prototypes or samples • Researching characteristics including stackability, durability, weight, environmental effects • Streamlining processes through automation • Integrating new materials to improve product manufacturing processes Recent Changes In late 2015, Congress expanded the ability to monetize the research tax credit. Eligible small businesses, defined as those with average sales of less than $50 million over the prior three tax years, will be able to use the credits to offset the Alternative Minimum Tax (AMT) for tax years beginning after December 31, 2015. Additionally, certain startups companies can use the research credit to offset the employer's payroll tax (i.e. FICA) liabilities. To do so you must meet certain criteria, including having sales of less than $5 million in the current year and have had less than five years of revenue. Documentation is Key Documenting potentially qualifying expenditures is the key to claiming the R&D tax credit. It's important to document the entire Pallet manufacturing companies and sawmills that use technology, such as the Pallet Design System™ (PDS), log grading or sor ting software, or other pallet design technology, may qualify for the R&D tax credit.