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 |