South 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 South 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
A manufacturing company in Columbia, South Carolina creating specialized parts for the automotive industries took a credit for the past two years when it designed a highly specialized prototype. This project involved a multi-year study covering the tax years 2013 and 2014. The Company qualified for the federal R&D Tax Credits of $213,867 and an additional $116,263 in South Carolina state R&D Tax Credits.
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FEDERAL
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SOUTH CAROLINA
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Year
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Total QREs
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Credit
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Total QREs
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Credit
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||
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2014
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$1,357,500
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$125,906
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$1,357,500
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$61,250
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||
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2013
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1,100,250
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87,961
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1,100,250
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55,013
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| Total | $2,457,750 | $213,867 | $2,457,750 | $116,263 | ||