Brown Helps Secure Permanence for Key Business Tax Credits

Research and Development Tax Credit, Section 179 Deductions, and the Work Opportunity Tax Credit Will Help Ohio Businesses Grow

WASHINGTON, D.C. – As the Senate and House consider legislation to extend tax credits, U.S. Sen. Sherrod Brown (D-OH) today announced several critical tax credits and incentives in the bill that will help Ohio businesses invest in research and grow.

“Ohio companies who are trying to invest in their community and spur innovation deserve a hand up for their efforts to build our state’s economy,” said Brown. “The tax extenders deal will enhance and improve many of the tools used by businesses in our state to hire veterans, invest in local communities, and expand their research opportunities.”

Research and Development (R&D) Credit

The Research and Development (R&D) Credit encourages innovation and allows companies to deduct the expense of research, development, and hiring of workers to conduct R&D.

Section 179

Section 179 supports small businesses by allowing them to deduct the cost of new or used depreciable assets – like equipment and computer software. The bill will increase the amount a company can expense. It will also accelerate the depreciation schedule, so that companies expensing more than the annual allowable deduction can get their money faster. In addition, Section 179 is critical to providing Ohio farmers with the flexibility they need to replace equipment and vehicles.

Alternative Minimum Tax

The bill modifies the Alternative Minimum Tax so that companies can accelerate their AMT credits instead of including bonus depreciation or regular accelerated depreciation in their income tax liability. This is important for many of Ohio’s manufacturing companies who accumulated AMT credits during the economic downturn.

Work Opportunity Tax Credit

The Working Opportunity Tax Credit (WOTC) helps employers hire individuals from targeted groups – like low-income Americans, veterans, or others with considerable barriers to gaining employment – by offering a tax credit based on the type of employee, their hours, and their wages. This includes veterans, Temporary Assistance for Needed Families (TANF) recipients, Supplemental Nutrition Assistance Program (SNAP) recipients, former felons, supplemental security income recipients, and other select groups. The bill authorizes an extension of the credit to target the long-term unemployed who have struggled to reenter the workforce.