Many of America’s leading innovative companies utilize the popular research and development tax credit, but unfortunately, the process for using the credits has become much too complicated and cumbersome. A new legislative plan from Congressman Jerry McNerney (D-CA) seeks to remedy this situation. His bill, the Innovation Tax Credit Act (H.R. 5681) would address these challenges by making the R&D tax credit permanent. At present, the credit is temporary and requires regular renewal by Congress. This process has the effect of increasing uncertainty about the credit’s future existence. Computing the credit is also quite complicated. HR 5681 would simplify the process by consolidating the current batch of five related credits into one simplified tax credit that will ultimately provide a credit for up to twenty percent of the cost of qualified R&D expenditures. Learn more about HR 5681, the Innovation Tax Credit Act of 2008.