Arkansas 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

  • Dollar-for-dollar reduction in your state income tax liability
  • Arkansas Credit carried forward up to 9 consecutive tax periods

Qualifications

More companies in Arkansas 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 medical research company in Forth Smith, Arkansas had never claimed the R&D Tax Credits before. This project involved the tax year 2021.   The Company qualified for the federal R&D Tax Credit of $75,000 and an additional $99,000 of state R&D Tax Credit in Arkansas.

FEDERAL
ARKANSAS
Year
Total QREs
Credit
Total QREs
Credit
2021
$750,000
$75,000
$300,000
$99,000