Do you know the comprehensive definition of eligible production activities for the DPAD? It may be broader than you think. If you are a traditional manufacturer, has your DPAD calculation kept up with changes in both your business and relevant tax law over the years?
Created in 2004 as part of the American Jobs Creation Act, the DPAD provides a significant tax break to entities engaged in production activities in the United States. Upon its creation, traditional manufacturers quickly established processes to quantify their annual DPAD. However, they often have failed to refresh these calculations over the years to keep up with changes in operations and applicable tax law. Accordingly, these organizations might not be realizing the full benefit of the DPAD each year.
Organizations engaged in activities outside the traditional definition of manufacturing, such as software development or food production, often are not aware that they may qualify for the DPAD at all. As a result, these organizations may be overstating their tax liability each year.
Is your organization taking full advantage of the DPAD rules? This webinar can help you find out.