Kansas 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 Kansas 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 Kansas City company designed and manufactured robotics equipment. The company claims R&D 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 $327,833 and an additional $50,917 in Kansas state R&D Tax Credits.

  
FEDERAL
 
KANSAS
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,300,000
$135,333
$1,300,000
$22,750
2013
900,000
91,000
900,000
15,167
2012
650,000
63,000
650,000
9,750
2011
450,000
38,500
450,000
3,250
     
Total $3,300,000$327,833 $3,300,000$50,917