Hawaii 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 for companies performing R&D in Hawaii.
Benefits
- Up to 20 cents of R&D tax credit for every qualified dollar
- Dollar-for-dollar reduction in your Hawaii income tax liability
- Excess credit is refundable
Qualifications
More companies in Hawaii 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 your company conducts more than 50% of its activities in qualified research, looking into the state’s R&D tax credit may be a great benefit.
Case Study
A company in Maui, Hawaii produces coffee and had never before claimed the R&D Tax credit. This project involved a 2021 year study. The company qualified for the federal R&D Tax Credits of $100,000 and an additional refundable credit of $150,000 in Hawaii state R&D Tax Credits.
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FEDERAL
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HAWAII
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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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2021
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$1,000,000
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$100,000
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$750,000
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$150,000
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