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 650,00057,750 650,000500,00043,750
2012 575,00051,917 575,000400,00027,500
2011 450,00037,333 450,000250,00012,500
Total $2,475,000$219,917 $2,475,000$1,750,000$145,750