Maine 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 Maine 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 manufacturing company in Portland, Maine creating syringes for the medical industry has been claiming the R&D credit for years. 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 credits of $464,333 and an additional $65,833 in Maine state R&D Tax Credits.

   
FEDERAL
 
MAINE
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,500,000
$129,500
$1,500,000
$17,500
2013
1,250,000
121,333
1,250,000
12,500
2012
1,150,000
112,000
1,150,000
15,833
2011
1,050,000
101,500
1,050,000
20,000
         
Total   $4,950,000 $464,333   $4,950,000 $65,833