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