BDO United States

BDO United States

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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:

FederalCaliforniaTotal
2007780,000960,3751,740,375
2006650,000960,3751,710,375
2005650,000960,3751,710,375
2004650,000960,3751,710,375
2003[4]960,375960,375
Total2,730,0004,801,8757,531,875

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.

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