Maximize Cash Flow and Minimize Risk with Section 174 Coverage
As changes in accounting under Section 174 create new challenges, many businesses face large, unfunded tax liabilities due to the amortization of R&D expenses. With a tailored insurance program, businesses can manage risk and gain the cash flow needed to cover current and past obligations.
Section 174 Coverage
What is Section 174 Coverage?
The change in accounting under Section 174 stemming the expiration of the Tax Cuts and Jobs Act of 2017
(TCJA) is affecting thousands of businesses across the country. Congress was considering reverting the law
back to the prior application pre-2017 but the Senate has yet to address the problem. Consequently, our
program allows a business the ability to address the risk associated with the uncertainty in the current legal
landscape specifically with regard with amortized R&D expenses. We are able to use insurance coverage to
manage your risk and at the same time create additional cash flow to offset the adverse consequences
associated with the change in law.
How Does it Work?
We use your prior and current year Qualified Research Expenses (QREs) to establish a baseline for
your custom risk profile. From there we are able to develop a premium model which will ensure compliance
with the accounting method change law that is fully funded. Using a mutual insurance carrier which has
agreed to write this coverage on behalf of our clients, we are able to place this coverage in 2024 which
helps offset current and prior obligations.
| Coverage Amount | Policy Period | Baseline Premium | Cost |
|---|---|---|---|
|
$1,000,000 – $100,000,000 |
2024 |
Qualified Research Expenses |
5 – 8% of Premium |
Underwriting Process
2024 Study & Review
of Prior QREs
Insurance & Finance Underwriting
Binding Coverage
Company works with NTG Advisors to establish Section 174 Coverage needs through current study and review of prior CREs.
Our insurance and finance team reviews the information submitted in your file to underwrite your coverage.
Online document endorsement and payment options makes binding coverage a seamless process.
|
Section 174 Cash Flow Comparison |
||
|---|---|---|
|
|
Section 174 Coverage |
Taking No Action |
|
Amortized Expense |
Up to 100% |
20% |
|
Cost |
5-8% |
24-49% |
|
Effect |
No Significant Impact |
Significant Cash Outflow |
|
Application Window |
By December 15 |
N/A |
Download Our Free Guide: Navigating Section 174 Coverage
Unlock the full potential of your business with our comprehensive guide on Section 174 Coverage. Learn how to mitigate the financial impact of the latest tax changes, secure additional cash flow, and protect your R&D investments.
Inside, you’ll discover:
-Key details on how Section 174 affects your tax liabilities
-Step-by-step instructions for implementing coverage
-Expert insights on maximizing your savings
Frequently Asked Questions
Simple. Cash-flow. The changes to the current law related to amortizing R&D expenses has created huge tax liabilities (in many instances unfunded) for thousands of companies across the country. By using 174 Coverage, your organization can revert the amortization schedule using savings from this current year to help cover current and past liabilities.
There are a number of businesses and CPAs across the country that have been seeking a solution for over two years to address the concern related to amortization. We have received very positive feedback about the program which allows us to work together with a
number of clients to offer this creative solution.
Speak to one of our professionals that can help determine eligibility and size of the coverage needed. From there you can implement this program to take effect by year-end.
Learn About 174 Section
Section 174 create new challenges, many businesses face large, unfunded tax liabilities due to the amortization of R&D expenses. With a tailored insurance program, businesses can manage risk and gain the cash flow needed to cover current and past obligations. Get in touch
IMPORTANT INFORMATION: Program terms and conditions apply. Please review application and loan agreement. WI state refunds do not qualify. Loan amounts must be used for business purposes only. This document is published and distributed for informational purposes only. Loans subject to underwriting. Not all businesses and individuals will qualify. Rates and Terms subject to change. National Tax Group does not participate in any filing of tax returns, is not authorized to file tax returns and only lends funds based on returns prepared by your CPA. 1. Personal guarantee required for the loan amount. 2. Based on 365 day loan term. Interest is prepaid. Rate is determined by a number of factors and will be presented prior to loan funds being issued. No refunds of prepaid interest will be issued for early repayment. 3.48-Hour timeline is an approximation and may take longer in some instances. Revised June 2024.