Emergency-related state tax relief available for taxpayers located in two counties of Michigan impacted by severe weather.
Step 2: Review Proration Notice
Step 2: Review Proration Notice
When to Review
- The Proration Notice for the Research and Development (R&D) Tax Credit it is expected to be available in April following the expense year (i.e. the calendar year when the MQREs were incurred).
- All eligible businesses must review the Proration Notice before claiming the R&D Tax Credit on the annual tax return.
- Eligible Withholding Tax filers who qualify and choose to offset payments for the credit prior to claiming it must review the Proration Notice before applying the offset.
How to Review
1. Wait for Proration Notice
After the R&D Credit Application deadline, Treasury will review all submitted claims to determine whether proration is necessary. Once that review is complete, Treasury will issue the Proration Notice. It is expected to be available in April following the expense year.
2. Review Proration Notice
Review the Proration Notice to see if a proration percentage applies. The notice may include different percentages for large and small employers. Check the employer size for the expense year to determine whether the proration percentage applies.
3. Apply Proration, If Applicable
If the Proration Notice includes a proration percentage that applies to the claimant, the unadjusted credit from the R&D Credit Application must be adjusted. Use the proration percentage to calculate the adjusted credit.
4. What Happens Next
Once the Proration Notice has been reviewed, prepare for the next step: Claim the R&D Tax Credit.
Early Credit Use — Withholding Tax Filers Only
Certain eligible Withholding Tax filers may qualify to offset their periodic payments for the R&D Tax Credit before claiming it on the annual return filed two calendar years after the expense year (with the annual return for the following tax year).