Tax Credits and Incentives

Hiring tax credits and incentives can help fund business goals of adding new staff to expand operations.

• Work Opportunity Tax Credit
  • The Work Opportunity Tax Credit is a federal credit that allows businesses to take a tax credit of up to 40% of qualified first-year wages for certified workers.
• Missouri Works Program
  • The Missouri Works Program is a state incentive that allows Missouri businesses to save on state withholding tax for new jobs and/or receive state tax credits, based on a percentage of payroll of the new jobs.

There are a variety of federal and state tax credits and incentives for businesses investing in renewable energy and energy efficient upgrades. Our advisors help businesses take advantage of these opportunities, including:

• Geothermal Tax Credit
  • The Geothermal Tax Credit is a federal credit for homeowners that purchase and install a geothermal heat pump system. In 2020, homeowners can claim 26% of the purchase and installation amount and that percentage decreases to 22% in 2021. There’s no limit to the value of the credit, and as long as you still own the house where the system is installed, you can claim the true percentage based on the year you installed the system.
• 45L Energy Efficient Tax Credit
  • The 45L Tax Credit is an energy-efficient tax credit for residential properties. The tax credit is $2,000 per unit to the developers of energy-efficient buildings. Qualifying properties include apartments, condos, townhouses and single-family homes. All eligible properties must be three stories or lower and have to incorporate energy-efficient features such as roofing, windows, doors or HVAC systems.
• 179D Tax Deduction
  • 179D allows for an accelerated tax deduction for installing energy-efficient property in commercial buildings. Building owners can take up to $1.80 per square foot deduction if they install property that results in energy and power cost reductions.

The Research and Experimentation Tax Credit, or R&D Tax Credit, offsets federal income tax liabilities for eligible research and development expenses dollar-for-dollar. The credit can also be used to offset payroll tax liabilities for eligible small businesses.

Real estate developers can take advantage of several tax credits and incentives depending on the property type and location. Aside from 1031 exchanges and cost segregation studies, below are two valuable credits for real estate.

• Historic Tax Credit
  • Historic Tax Credits are state credits for the rehabilitation of a commercial or residential property. Eligible properties can receive a credit for 25% of the renovation costs to be used against state tax liability.
• Low Income Housing Tax Credit
  • The Low Income Housing Tax Credit Program is a federal program that offers developers a dollar-for-dollar credit to construct or rehabilitate affordable rental housing for low-income households.

Our State and Local Tax (SALT) advisors help businesses navigate applicable state and local laws and take advantage of credits and incentives. We track tax trends, policies and regulations across the U.S. and offer ways to minimize your tax burden.