Tax and Finance Management

New Law Expands R&D Payroll Tax Credit

OMA Connections Partner Clark Schaefer Hackett reports that the federal Inflation Reduction Act law doubles the amount a business can potentially claim as an R&D tax credit to offset its payroll tax for tax years starting after 2022 — to a maximum of $2.5 million over five years.

Qualified businesses can leverage the R&D tax benefit even if they have little to no income tax liability. 10/25/2022

Year-End Tax Planning Webinar, Nov. 16

On Nov. 16, OMA Connections Partner CliftonLarsonAllen will host a year-end tax planning webinar for businesses.

This no-cost event will help manufacturers take advantage of tax credits and incentives, including for R&D, real estate, energy, and workforce. It will also address accounting changes. Register here. 10/27/2022

Think Tank: U.S. Tax Competitiveness Will Worsen if 2017 Tax Law Provisions Expire

Unless Congress acts soon, many positive tax reforms authorized by the 2017 Tax Cuts and Jobs Act (TCJA) will soon phase out or expire. (For example, deductions for equipment are at risk of going away completely in 2026.)

In this insight, the non-partisan Tax Foundation says if key TCJA provisions aren’t extended, U.S. tax competitiveness will slip further — from No. 22 in 2022 to No. 25 in 2023. 10/24/2022

OMA Members Briefed on Inflation Reduction Act’s Tax Provisions

The OMA’s Tax and Finance Committee held its third and final regularly scheduled meeting of the year on Oct. 19. Approximately 40 members participated online or in person.

Guest speakers included Deborah Gordon, principal, tax services at RSM, an OMA Connections Partner. Gordon provided this comprehensive overview of the tax provisions in the federal Inflation Reduction Act.

Members also had a conversation with state Rep. Riordan McClain (R-Upper Sandusky) on his efforts to repeal Ohio’s corporate activity tax (CAT) via House Bill 234. More than 15 years ago, the OMA helped lead the repeal of Ohio’s antiquated corporate franchise tax and tangible personal property tax, which were replaced with the much more manufacturing-friendly CAT. 10/19/2022

Expert: Inflation Reduction Act Will Expand Burden for Companies Doing Business Abroad

International tax bureaucracy is poised to grow more complex, according to this insight from OMA Connections Partner Plante Moran. The firm’s CFO says the new law’s corporate tax increase “may be aimed at giants such as Amazon and Bank of America, but the regulatory burden will also fall significantly on many smaller companies with overseas operations.” 10/17/2022

ODT Tax Webinar for Small-Business Owners, Nov. 17

The Ohio Virtual Tax Academy, hosted by the Ohio Department of Taxation (ODT), is a no-cost webinar designed to provide tax-related information to small-business owners. The next webinar is Nov. 17 and will cover income taxes; pass-through entity and fiduciary income taxes; and Ohio’s sales tax as it pertains to construction contracts. 10/17/2022

Guidance on Bonus Depreciation Phase-Out

The 2017 federal tax law significantly boosted the potential value of bonus depreciation. But the amount of first-year depreciation available will begin to drop from 100% after 2022 — and businesses should plan accordingly, according to this guidance from OMA Connections Partner Hall, Kistler & Company. 10/20/2022

NAM Calls for Repeal of Anti-Competitive R&D Tax Policy

The National Association of Manufacturers, and the business community including the OMA, is appealing to Congress to repeal a recent tax change that makes R&D more costly to conduct in the U.S.

Up until January 2022, a business in the U.S. could deduct 100% of its R&D expenses in the year during which those expenses occurred. A tax code change that took effect this year now requires businesses to spread those deductions over a period of years making investment in innovation more expensive to conduct. Read more from the NAM. 10/12/2022

RSM Offers Virtual Tax Summit

OMA Connections Partner RSM offers its annual tax summit in a virtual platform Oct. 31–Nov. 3 for chief financial officers, tax executives, and finance and tax professionals. Learn more and register here. 10/10/2022

Tax Policy Changes Dependent on Midterm Elections

In Washington, D.C., congressional staff on both sides of the aisle are conceding that the tax policy outlook for the remainder of the year largely depends on results of the midterm elections.

This insight from OMA Connections Partner RSM notes that two key concerns for manufacturers are the section 174 R&D tax amortization issue, and the new section 163(j) calculation for determining business expense deductions. 10/5/2022