Colorado 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 Colorado 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 company in Colorado Springs qualified for the federal R&D credit of $156,333 and an additional $15,750 in Colorado State R&D Tax Credits, of which $3,938 could be claimed in 2014. The Company qualified for the federal R&D Tax Credit of $156,333 and an additional $15,750 of state R&D Tax Credit in Colorado, of which $3,938 could be claimed in 2014. The remaining Colorado credits were carried forward.
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FEDERAL
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COLORADO
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Year
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Total QREs
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Credit
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Total QREs
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Credit
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||
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2013
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$1,300,000
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$156,333
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$1,300,000
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$15,750
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||
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2012
|
900,000
|
900,000
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||||
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2011
|
650,000
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650,000
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||||
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2010
|
450,000
|
450,000
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||||
| Total | $3,300,000 | $156,333 | $3,300,000 | $15,750 | ||