Can I Claim R&D Tax Credits in Arizona?
Yes, you can claim R&D tax credits in Arizona. The state offers a research and development tax credit program known as the Credit for Increased Research Activities.
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The Research and Development Tax Credit (R&D) is a tax credit available to businesses of all sizes that engage in research and development activities within the United States. This tax credit is not limited to scientists and research labs, but it can be utilized by a variety of businesses and industries. The R&D tax credit was designed to encourage research and development efforts conducted in the United States. Over time, an increasing number of companies have started utilizing this tax credit. Moreover, the Protecting Americans from Tax Hikes (PATH) Act of 2015 made the R&D tax credits permanent and expanded the eligibility criteria to include startups.
What are the Potential Benefits of the R&D Tax Credit?
When a qualifying company utilizes R&D tax credits, it can potentially achieve substantial cost savings. These benefits include:
- Increasing Cash Flow
- Federal and State Dollar-for-Dollar Income Tax Reduction
- Claim Credits for Open Tax Years Going Back 3-4 Years
- Reducing Your Tax Rate
$1.6 BILLION
Who Can Claim the R&D Tax Credit?
Contrary to popular belief, R&D tax credits are not just for scientists and groundbreaking inventions. In fact, companies of all sizes and industries are eligible to claim these credits for their innovative activities. It's surprising how many companies are unaware of their qualification and are missing out on substantial federal and state R&D tax credits. Don't leave money on the table - find out if you qualify today.
The same activities propelling your business's growth are the ones eligible for the R&D tax credit.
- Developed new products
- Improved existing products
- Developed software for internal or external use
- Improved manufacturing processes
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The activities that qualify for the Arizona R&D tax credit are the same ones driving growth in your business.
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10,700
How Do I Claim the R&D Tax Credit?
Companies can usually claim a federal R&D tax credit equivalent to 7-10% of their eligible expenses. As an example, a software developer, engineer, or lab technician earning a salary of $100,000 per year could save up to $10,000 in taxes.
Eligible expenses for research activities within your company typically include employee compensation, materials, and contracted services. Documentation such as payroll records, financial records, and vendor invoices can serve as sufficient evidence to support your qualified expenses.