Idaho 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 Idaho 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 Nampa, Idaho develops new formulas for its expanding line of nutritional shakes and improved processing techniques for its manufacturing plant. 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 the federal R&D Tax Credits of $558,833 and an additional $166,300 in Idaho state R&D Tax Credit.
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FEDERAL
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IDAHO
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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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2014
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$2,400,000
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$264,833
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$2,400,000
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$71,750
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2013
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1,400,000
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143,500
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1,400,000
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43,250
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2012
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1,000,000
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98,000
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1,000,000
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31,050
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||
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2011
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650,000
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52,500
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650,000
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20,250
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| Total | $5,450,000 | $558,833 | $5,450,000 | $166,300 | ||