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.

  
FEDERAL
 
SOUTH CAROLINA
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,357,500
$125,906
$1,357,500
$61,250
2013
1,100,250
87,961
1,100,250
55,013
      
Total$2,457,750$213,867$2,457,750$116,263