How Do You Qualify for Tax Credits and Incentives?

Chad Bice | August 8th, 2012

Don’t Leave Money on the Table

If your business is thinking of hiring or training employees or investing in fixed assets, you might qualify for a tax credit.  But, tax credits need to be considered up front.  Once you miss the boat on applying for them, it’s too late, even if you would have been a perfect candidate.

Securing these types of credits and incentives can dramatically improve your return on investment.

Types of Business Tax Credits

Commonly secured credits and incentives include:

  • Job creation credits
  • Job training credits or grants
  • Low interest loans
  • Infrastructure grants
  • Property tax abatements
  • Tax increment financing

Additionally, there are special industry-related tax credits and deductions.  Each of these credits and incentives are extremely fact specific.  They have their own sets of requirements, intricacies and necessary lead time.

The Tax Credit Process

The key to successfully securing credits and incentives is having enough lead time.  Proper lead time is at least six months and potentially up to three years prior to making the investment.  Why so long?  Because it gives the investor enough time to negotiate the incentives with the taxing authority prior to the investment.  At this point, the investor still has some bargaining power.  If you wait until after you’ve made the investment to ask for the credit, it’s no longer an incentive, but a reward.  When you’re asking for a credit for the work that you’ve already done, you lose your bargaining power.  More often than not, if the investment is made prior to the proper filings and negotiations with the taxing authority, the ability to secure the incentive is lost.

Extensive lead time is also important because it can give the investor the opportunity to wrap three years’ worth of investments into one project.  Brining this larger project to the taxing authority means that they might offer more credits for the combined project than they would for each of the individual projects. In the situation, the credits you get could be a whole lot bigger than the sum of their parts.

Credits and incentives are available for almost every industry, but there are many of them for healthcare, manufacturing, distribution, professional services, trucking and oil and gas, just to name a few.

Rea’s Ohio Business Tax Credit Professionals

If you’re in any of the businesses listed above and you don’t work to secure tax credits, you might be leaving money on the table.  Rea’s Ohio state and local tax team can help you to understand the credits that you might qualify for – and help you to get them.  Securing tax credits can enhance your cash flow and maximize the return on your investment.  Consider the credits and incentives that your company has a right to secure.  Contact Rea & Associates to get the credits and incentives you deserve.

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