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 2017 thru 2020. 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.
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FEDERAL
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NEW YORK
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Year
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Total QREs
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Credit
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Total QREs
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Credit
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2020
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$1,400,000
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$141,166
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$1,400,000
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$42,000
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2019
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$1,000,000
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$98,000
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NA
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NA
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2018
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$750,000
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$73,500
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NA
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NA
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||
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2017
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$500,000
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$49,000
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NA
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NA
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| Total | $3,650,000 | $361,666 | $1,400,000 | $42,000 | ||