Florida R&D Tax Credit

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R&D tax credits for Florida

Florida offers a few different tax credits for businesses conducting research and development (R&D) within the state. The Florida Research and Development Tax Credit provides a credit of 10% of qualified research expenses (QREs) over the base amount.

This credit is available to C Corporations only and is limited to 50% of a company’s tax liability. The credit amount is capped at $23 million for 2016. To claim the credit, a company must declare the federal credit. The base amount is calculated as the average of the previous four tax years’ QREs.

Does Florida Have An R&D Tax Credit?

Yes, Florida offers a credit of 10% of qualified research expenses (QREs) over the base amount. The credit is available to C Corporations only and is limited to 50% of a company’s tax liability. The credit amount is capped at $23 million for 2016. To claim the credit, a company must claim the federal credit. The base amount is calculated as the average of the previous four tax years’ QREs.

What Are The Qualified Research Expenses?

Qualified research expenses (QREs) are directly related to the experimentation and design of new products or services, the improvement of existing products or services, and the development of new or improved processes. QREs also include:

  • Salaries and wages of employees who are directly engaged in R&D.
  • The cost of supplies used in R&D.
  • Payments to contractors for services related to R&D.

Who Is Eligible For R&D Tax Incentive?

The Florida Research and Development Tax Credit is available to C Corporations only. The credit is limited to 50% of a company’s tax liability and is capped at $23 million for 2016. To claim the credit, a company must claim the federal credit.

How Do I Claim R&D Tax Relief?

You must first claim the federal credit to claim the Florida Research and Development Tax Credit. The base amount is calculated as the average of the previous four tax years’ QREs. The credit amount is limited to 50% of a company’s tax liability and is capped at $23 million for 2016.
This also means if your business revolves around R & R&D and you are a C-Corp, you can get a sizable chunk of change back from the state in the form of this tax credit. Remember that you must first claim the federal credit even to be eligible for the Florida Research and Development Tax Credit.Your business should also be certified by the Department of Economic Opportunity as a qualified research and development company that is related to:

  • Aviation or
  • Aerospace
  • Defense
  • Agriculture
  • Manufacturing
  • Computer Science
  • Life Sciences
  • Information
  • Technology
  • Clean Technology
  • Professional
  • Services

If you meet these qualifications, then the Florida Research and Development Tax Credit could be a great tax incentive for your business. Not all businesses are eligible, but it’s worth checking if your company conducts a significant amount of R&D in Florida.

 

Excess credits will also be carried forward for up to five years. So whether you’re a small or large business, the Florida Research and Development Tax Credit could be a valuable incentive to conducting R&D in the Sunshine State.

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