Utah 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 Utah 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 sporting goods manufacturer in Salt Lake City, Utah employs close to one hundred employees in its Salt Lake City offices. The Company has been claiming the research and development tax credit for many years for activities around the development and improvement of their sporting goods and protective wear. This project involved a multi-year study covering the tax years 2011 - 2014. The Company qualified for the federal R&D Tax Credits of $370,500 and an additional $383,760 in Utah State R&D Tax Credits.

FEDERAL
UTAH
Year
Total QREs
Credit
Total QREs
Credit
2014
$1,100,000
$110,000
$1,100,000
$110,000
2013
950,000
95,000
950,000
95,000
2012
875,000
87,500
875,000
87,500
2011
780,000
78,000
780,000
91,260
Total $3,705,000 $370,500 $3,705,000 $383,760