Fiscal cliff legislation extends research credit, resolves M&A-related credit issue

January 2013

Overview

The American Taxpayer Relief Act of 2012 (the Act), signed into law by President Barack Obama on January 2, 2013, extends the section 41 research credit for two years retroactively from January 1, 2012, through December 31, 2013. The new law also resolves an issue regarding the treatment of qualified research expenditures (QREs) in the event of an acquisition or disposition of a trade or business.

The credit rates for both the regular credit, 20%, and the alternative simplified credit, 14%, remain unchanged by this credit extension.

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