Research and Development Credit

[cpabsd]

 

                I have a client that has an S corp that generates a R&D credit.  For 2015, the S corp generated taxable income but the credit could not be used at individual level due to AMT limitations.  For 2016, the S corp had a loss and the credit is not allowed because of no taxable income from the entity.  Both credits are being carried forward.  I’m trying to understand what the scenario has to be for him to actually be able to use the credits.  The total carry forward amount is $38k.  Can you help me better understand this?  Would wages from the entity be considered taxable income attributable to the entity?

                Also, if the taxpayer is no longer an owner of the S corp, does that mean those credits are useless? Any help or guidance is appreciated. 

 

Bonnie