North Carolina 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 North Carolina 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
An aerospace company in Raleigh, North Carolina creates parts for aircraft. This project involved a multi-year study covering the tax years 201 - 2014. The Company qualified for the federal R&D Tax Credit of $364,237 and an additional $118,373 in North Carolina State R&D Tax Credits.
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FEDERAL
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NORTH CAROLINA
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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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2014
|
$1,113,300
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$111,330
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$1,113,300
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$36,182
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||
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2013
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968,116
|
96,812
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968,116
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31,464
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||
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2012
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834,870
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83,497
|
834,870
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27,133
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||
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2011
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725,980
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72,598
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725,980
|
23,594
|
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| Total | $3,642,266 | $364,237 | $3,642,266 | $118,373 | ||