
INSIGHTS FOR FINANCIAL INSTITUTIONS	October 31, 2016

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Gary Smith, CPA, Partner, Director of Financial Institutions

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New Opportunities for Banks to Claim R&D Tax Credit

On October 3, the IRS released final regulations on claiming the research and development (R&D) tax credit for computer software developed for internal use. The final rules narrow the definition of "internal use" software in a generally favorable way for banks and may provide new opportunities to claim R&D tax credits.

The R&D tax credit benefit can vary based on a taxpayer's fact pattern. As a rule of thumb, $500,000 of qualified R&D costs can generate a federal tax benefit of $25,000 to $35,000. In addition, many states offer an R&D credit which can increase, even double in some cases, this benefit.

Click here to read more about the final regulations and to learn whether your bank may qualify for R&D tax credits.

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