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.
FEDERAL
|
NORTH CAROLINA
|
|||||
Year
|
Total QREs
|
Credit
|
Total QREs
|
Credit
|
||
2014
|
$1,113,300
|
$111,330
|
$1,113,300
|
$36,182
|
||
2013
|
968,116
|
96,812
|
968,116
|
31,464
|
||
2012
|
834,870
|
83,497
|
834,870
|
27,133
|
||
2011
|
725,980
|
72,598
|
725,980
|
23,594
|
||
Total | $3,642,266 | $364,237 | $3,642,266 | $118,373 |