Vermont 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 Vermont 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 Burlington, Vermont conducted a look back study for the prior two years for the R&D credit. This project involved a multi-year study covering the tax years 2018 through 2020.  The Company qualified for the federal R&D Tax Credits of $278,930 and an additional $75,311 in Vermont state R&D Tax Credits.

FEDERAL
VERMONT
Year
Total QREs
Credit
Total QREs
Credit
2020
$1,002,170
$100,217
$1,002,170
$27,059
2019
$927,935
$92,793
$927,935
$25,054
2018
$859,199
$85,920
$859,199
$23,198
Total $2,789,304 $278,930 $2,789,304 $75,311