Under the President’s New 2014 budget, the budget calls for making the R&D tax credit permanent so as to allow companies to plan R&D expenditures and associated credit with more certainty; moreover, the plan calls for increasing the alternative simplified credit or ASC up to 17% from the existing 14% rate.
Although under various prior House bills, the ASC increase was discussed with eliminating the ‘regular’ credit referring back to the 1984-1988 base years. In the President’s proposal, the ‘regular’ R&D credit will be maintained, allowing companies the choice of using the regular credit vs. the ASC under the new 17% rate.