R&D Credits & Incentives
BDO's R&D professionals have helped hundreds of companies, in virtually every industry, claim - and sustain on exam or at appeals - more than $2 billion of these R&D benefits:
Tax Benefits
- R&D credits and deductions
- Sometimes available for the same dollars in two, even three countries
- Investment credits
- Tax exemptions or holidays
- Accelerated depreciation
- Training incentives
Non-Tax Benefits
- Cash subsidies and grants
- Government-sponsored centers/programs
- No- or low-interest loans
- Reduced red tape
Example: Your U.S. R&D Tax Credits
A company incurred $10 million in qualified research expenses ("QREs")1 for activities in California2 in each of the past four years. Its benefit could be as much as:
| Federal | California | Total | |
|---|---|---|---|
| 2007 | 780,000 | 960,375 | 1,740,375 |
| 2006 | 650,000 | 960,375 | 1,710,375 |
| 2005 | 650,000 | 960,375 | 1,710,375 |
| 2004 | 650,000 | 960,375 | 1,710,375 |
| 2003 | [4] | 960,375 | 960,375 |
| Total | 2,730,000 | 4,801,875 | 7,531,875 |
1 QREs include taxable wages, a % of contractor expenses, and the cost of supplies, paid or increased for "qualified services."
2 The majority of U.S. states have credits. Credit rates vary.
3 Assuming the standard three open years for federal and four for California. Additional years may be open because of, e.g., exams, NOLs.
4 Federal credits for this and earlier years may be available, even though these years are closed by the statute of limitations.
