Georgia 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 Georgia 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 Columbus designs and develops industrial components for the auto industry. The company claims R&D Tax Credits each year for the development activities of its engineers. This project involved a multi-year study covering the tax years 2011 – 2014. The Company qualified for federal R&D Tax Credits of $219,917 and an additional $145,750 of state R&D Tax Credit in Georgia.

Year  
Total QREs
FEDERAL
Credit
  Total QREs Total Georgia
Gross Receipts
GEORGIA
Credit
2014   $ 800,000 $ 72,917   $ 800,000 $ 600,000 $ 62,000
2013   650,000 57,750   650,000 500,000 43,750
2012   575,000 51,917   575,000 400,000 27,500
2011   450,000 37,333   450,000 250,000 12,500
Total   $2,475,000 $219,917   $2,475,000 $1,750,000 $145,750