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.

  
FEDERAL
 
IDAHO
Year
Total QREs
Credit
Total QREs
Credit
2014
$2,400,000
$264,833
$2,400,000
$71,750
2013
1,400,000
143,500
1,400,000
43,250
2012
1,000,000
98,000
1,000,000
31,050
2011
650,000
52,500
650,000
20,250
     
Total $5,450,000$558,833 $5,450,000$166,300