Posted by Jeffrey Feingold on 12.28.23
The R&D Tax Credit Ohio is available annually and is based upon qualified research expenses in Ohio allowed under section (s.) 41 of the Internal Revenue Code (IRC). The Ohio Research and Development Investment Tax Credit, which is authorized within Section 5751.51 of the Ohio Revised Code, is a nonrefundable credit against the Commercial Activity Tax (CAT). Qualifying expenses fit into two categories: in-house research expenses and contracted research expenses.
The credit equals seven percent of the amount of Qualified Research Expenses in excess of the taxpayer's average investment in Qualifying Research Expenses over the three preceding taxable years. Any excess credit not used for the taxable year in which it is earned may be carried forward for up to seven years.
Who is eligible?
In order to qualify, the taxpaying corporation must invest in "Qualified Research Expenses", as defined in Section 41 of the Internal Revenue Code. Both in-house expenses, such as wages and supplies, and contract expenses qualify (See Section 41 of IRC for more details).
How do we apply?
There is no special application or approval process for this tax credit. The credit may be claimed on the tax return, but will be subject to audit by the Department of Taxation.
How is this related to the Federal Income Tax Credit?
To receive an Ohio research and development tax credit, the corporation must be allowed a research credit for the taxable year against federal income tax for qualified research expenses under s. 41, IRC. Federal forms are available at www.irs.gov/Forms-&-Pubs.
Ohio's definition of R&D expense is the same as the federal and generally includes amounts paid for wages, supplies and 65% of amounts paid to outside research firms.
Who can answer questions about these tax credits?
We at Tax Point Advisors offer both federal R&D tax credit services and state R&D tax credit services to companies of all sizes and to CPA's for their clients. We can help you identify all of the credits that apply to you, complete all the application paperwork, and give you a bullet-proof defense in case of an audit. We've never had a client's claim denied! We are the only company to have a industry-leading audit success.
What are the advantages of using Tax Point Advisors?
Tax Point Advisors is comprised of a team of CPAs, engineers and tax attorneys focused on helping CPAs and their clients apply for and receive substantial federal and state Research and Development Tax Credits. We have offices in many states and serve CPAs and clients across the U.S. We have a Tax Point Advisors Partner manage every study. We are also the only firm which utilizes an independent, third party tax attorney and IRS audit defense expert to review our studies before they are completed.
Get a FREE, No-Risk Assessment.
Call us today to determine the extent of Qualified Research Activities and to estimate the amount of the R&D credits for which you are eligible. We'll send a team out to interview your key personnel, and then we'll advise you regarding the potential tax savings and future benefits of conducting an R&D Tax Study. There is no cost and no obligation. We are so confident that we can save you money, that there is no charge for the assessment. Call our office today at 1 (800) 260-4138 to see how much you can save!
