Domestic Production Activities Deduction
The Domestic Production Activities Deduction went into effect in 2005. It was established to provide tax relief for businesses that produce goods in the United States. The objective of this deduction is to increase production and employment in the United States. As a result, in order to qualify for this deduction you must have qualifying domestic production activities and employees.
Qualifying Domestic Production Activities
– Construction performed in the United States.
– Electricity, potable water or natural gas produced in the United States.
– Films and videos produced at least 50% in the United States.
– Architectural or engineering services performed in the United States for domestic construction projects.
– The disposition of tangible personal property, sound recordings or computer software created or developed, in whole or in part, in the United States.
Certain exceptions apply.
IRS Tax Form 8903 and Instructions
