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.
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FEDERAL
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OHIO
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Year
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Total QREs
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Credit
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Total QREs
|
Credit
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||
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2013
|
$1,362,580
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$88,568
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$1,362,580
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$28,651
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||
|
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 | ||