Congress has elected to include several tax credits to incentivize taxpayers to spend their capital in certain areas. The two most prominent tax credit opportunities extending into the 2011 tax year are the Research and Development Credit Incentive and the Work Opportunity Tax Credit.

The Research Credit will expire January 1, 2012 and is a dollar for dollar credit for expenses related to research and development. Expenses must be for qualified research and include wages, qualified supplies and contract costs. While this credit sounds limited, there are many industries that can take advantage of this credit to help reduce taxes.

The next credit is the Work Opportunity Tax Credit and is available to employers that have qualified employees who begin work before January 1, 2012. Employers can hire from twelve selected target groups which will qualify them for the credit. There is a minimum employment or retention period of a minimum of 120 work hours. For Summer Youth employees to qualify, they must work 90 days between May 1 and September 15.

In addition to the above, there are other often missed credit opportunities that include tip credits, fuel credits and energy credits for both personal and business. As we plan with our clients, we look at all the opportunities to reduce taxes so we may ask additional questions to identify any credits you may be eligible to take.

If you have any questions about the credits discussed here or about any credits that might be available to you, please contact Nancy Schulze, Sarah Hancock or Leisha Gardner at 972-644-7112.