Wisconsin R&D Tax Credit Case Study
The R&D tax credit is one of the most valuable credits leveraged by companies. The R&D credit yields billions of dollars in federal and state benefits to companies engaged in qualifying research. The R&D tax credit can provide a significant reduction to current and future tax liabilities and a source of cash.
Benefits
- Up to 13.5 cents of R&D tax credit for every qualified dollar
- Dollar-for-dollar reduction in your federal and state income tax liability
- Credit carried forward up to 20 years
Qualifications
More companies in Wisconsin can now qualify for the R&D tax credit. Companies are able to qualify R&D activities beginning with the development of concepts and extend to the point where a product, process, formula, or other business component is ready to be commercially released. If you are engaged in any research activities, looking into a potential R&D tax credit may be a great benefit. In addition, look back studies can recognize unclaimed credits for the last 3 or 4 open tax years.
Case Study
A Wisconsin software development company had never before claimed the R&D Tax Credits. This project involved a multi-year study covering the tax years 2011 - 2014. The Company qualified for the federal R&D Tax Credit of $361,666 and an additional $104,858 of state R&D Tax Credit in Wisconsin .
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FEDERAL
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WISCONSIN
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Year
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Total QREs
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Credit
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Total QREs
|
Credit
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||
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2014
|
$1,400,000
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$141,166
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$1,400,000
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$51,585
|
||
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2013
|
1,000,000
|
98,000
|
1,000,000
|
29,723
|
||
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2012
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750,000
|
73,500
|
750,000
|
23,550
|
||
|
2011
|
500,000
|
49,000
|
NA
|
NA
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||
| Total | $3,650,000 | $361,666 | $3,150,000 | $104,858 | ||