Florida 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 Florida 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 Miami designs and develops component parts for the aviation industry, a qualified target business industry for Florida's R&D tax credit.  The company claims R&D credits each year for the development activities of its engineers.  The company submits its application and is awarded a R&D credit for the 2014 tax year. The Company qualified for the federal R&D Tax Credit of $58,221 and an additional $11,713 of state R&D Tax Credit in Florida.

  
FEDERAL
 
FLORIDA
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,012,550
$58,221
$1,012,550
$11,713