New York 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 New York 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 pharmaceutical company in New York had never before claimed the R&D credit. This project involved a multiyear study covering years 2011 thru 2014. The Company qualified for the federal R&D Tax Credit of $361,666 and an additional $42,000 of state R&D Tax Credit in New York.

   
FEDERAL
 
NEW YORK
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,400,000
$141,166
$1,400,000
$42,000
2013
1,000,000
98,000
NA
NA
2012
750,000
73,500
NA
NA
2011
500,000
49,000
NA
NA
         
Total   $3,650,000 $361,666   $1,400,000 $42,000