North Dakota 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 Dakota 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 Fargo Company manufactures farming equipment. It had never before claimed the R&D Tax Credit for the development activities of its software programmers. This project involved a three-year study with a two-year look back to claim credits for years 2011 through 2013. The Company qualified for the federal R&D Tax Credit of $390,726 and an additional $516,329 in North Dakota state R&D Tax Credit.

  
FEDERAL
 
NORTH DAKOTA
Year
Total QREs
Credit
Total QREs
Credit
2013
$1,842,800
$137,252
$1,842,800
$172,852
2012
2,087,706
96,160
2,087,706
194,894
2011
1,842,800
157,314
1,842,800
148,583
      
Total$5,503,651$390,726$5,503,651$516,329