Maximize the New Florida R&D Tax Credit

Posted by Jeffrey Feingold on 01.16.14

A new Florida Research and Development tax credit can help Florida businesses with their bottom lines. This tax credit helps not only traditional R&D businesses, but also many businesses that are implementing new methods or processes. This credit is a huge incentive for some companies to update the way they are operating. Other companies are already qualifying for this tax break and just need to use it.

What is the R&D tax credit?

The state of Florida offers a Research and Development tax credit for businesses to encourage new jobs and to promote a better business climate in the state of Florida. Businesses are encouraged to develop new products, gain new patents, and try new methods, processes, and software. If you qualify and the Florida budget has enough money, the credit is 10% of the amount of qualified research expenses incurred in the state. The R&D Tax Credit Florida is available annually for tax years beginning on or after January 1, 2012.

Who qualifies?

The new FL R&D Tax Credit has no surprises in who qualifies. Anyone who qualifies for the federal R&D tax credit according to section 41 of the Internal Revenue Code also qualifies for the Florida tax credit. An online application must be submitted by March 20 of each year in order to claim this tax credit. This application is available on the Department of Revenue's Internet website at through the tax incentives page.  

Eligible Businesses

Lots of businesses are eligible that don't have laboratories and traditional research because they have new methods or processes. Almost any company can be eligible. Some eligible businesses include:

  • General contractors
  • Electrical contractors
  • Software companies
  • Manufacturing of products
  • Chemical Manufacturing
  • Engineering firms
  • Food Sciences
  • Machine Shop / Tool & Die
  • Textiles/Apparel
  • Job Shops (metal fabrication, gears, coatings, HVAC, recycling, etc.)
  • Medical Devices
  • Packaging
  • Plastics
  • Semiconductor
  • Telecommunications
  • And more

How does it work?

Since Florida has a set amount of money to give out for this tax incentive, if companies request more than that, someone doesn't get included. This makes the online application of key importance. After you submit the online application, The Department of Revenue provides a confirmation number. This lets you know that you have been accepted. Credits are allocated in the order that the applications are received. Starting on April 1 of each year, letters are mailed out from the Department of Revenue to let you know the amount of credit allocated to you and the tax year in which you can claim it on the Florida tax return. The combined total amount of tax credits which may be granted to all business enterprises under s. 220.196, Florida Statutes (F.S.), during any calendar year is $9,000,000, and is granted on a first come first serve basis. This makes it extremely important to file as soon as possible before the limit is reached.  

How can I get my questions answered about this tax credit?

We recommend that you talk with your tax attorney or CPA about your eligibility or contact us at Tax Point Advisors. We offer a risk-free, no obligation free initial consultation to determine your eligibility. Then we give you an estimate of the savings you can expect as well as a flat fee for doing the research and filing the forms for you.

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