Indiana 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 Indiana 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 biotech firm in Indianapolis with fewer than 100 employees had never before claimed the R&D Tax Credit. This project involved a multi-year study covering the tax years 2018 - 2021. The Company qualified for the federal R&D Tax Credit of $312,666 and an additional $81,250 in Indiana state R&D Tax Credit.
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FEDERAL
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INDIANA
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Year
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Total QREs
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Credit
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Total QREs
|
Credit
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||
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2018
|
$1,012,550
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$101,255
|
$1,012,550
|
$75,941
|
||
|
2019
|
955,200
|
95,520
|
955,200
|
71,640
|
||
|
2020
|
905,800
|
90,580
|
905,800
|
67,935
|
||
|
2021
|
895,700
|
89,570
|
895,700
|
67,178
|
||
| Total | $3,769,250 | $376,925 | $3,769,250 | $282,694 | ||