Ohio 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 Ohio 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 custom door and lock company in Columbus, Ohio had never before claimed the R&D credit for the development activities employees. This project involved a four-year study with a three-year look back to claim credits for years 2010 through 2013. The Company qualified for the federal R&D Tax Credits of $338,649 and an additional $64,859 in Ohio state R&D Investment Tax Credit.

  
FEDERAL
 
OHIO
Year
Total QREs
Credit
Total QREs
Credit
2013
$1,362,580
$88,568
$1,362,580
$28,651
2012
1,025,759
66,674
1,025,759
11,508
2011
965,404
96,540
965,404
13,476
2010
868,670
86,867
868,670
11,224
     
Total $4,222,413$338,649 $4,222,413$64,859