The state of Utah R&D Tax Credit provides an advantageous Research and Development (R&D) Tax Credit to eligible taxpayers who have incurred qualifying research expenditures within the state. This tax credit, while sharing similarities with the federal Section 41 Credit for Increasing Research activities, presents unique variations and exceptions that distinguish it from its federal counterpart.
The R&D Tax Credit in Utah offers eligibility to taxpayers who have qualified research expenses (QREs) in accordance with IRC §41 during the relevant tax period. By claiming this tax credit, taxpayers can offset their tax liability effectively.
Utah tax returns have the flexibility to be amended for up to three years in order to claim the R&D Tax Credit. Furthermore, if eligible, taxpayers can carry forward the credit for up to 14 years. It’s important to note that this credit is non-refundable, meaning it can only be used to offset tax obligations and cannot result in a cash refund.
The Utah R&D Tax Credit offers two options for calculating the credit amount:
These alternative calculation methods provide flexibility for taxpayers to choose the most beneficial option based on their specific circumstances and ensure they receive the maximum tax credit available for their research and development activities in Utah.
The Utah Research and Development (R&D) Tax Credit offers financial incentives for companies engaging in research activities within the state. Eligible businesses can benefit from a 5% tax credit on incremental expenses for research activities over a baseline amount, as well as a 5% credit on specific payments made to qualified organizations that focus on basic research in Utah. Additionally, a 7.5% tax credit is available on qualified research expenditures for the current tax year. These incentives aim to encourage innovation and technological advancement within Utah.
Experience the power of the Utah research and development (R&D) tax credit, enabling businesses to leverage a portion of their qualifying research expenses.
Utah’s R&D tax credit acknowledges wages paid to employees and subcontractors directly involved in research and development activities within the state. This recognition incentivizes businesses to invest in their workforce and drive innovation, enhancing Utah’s research and development landscape.
Most states offer R&D tax credits as well with many of them being more lucrative than the federal credit. At Source Advisors, we can help assess your company’s federal R&D tax credit opportunity and also determine any state R&D tax credit availability. Our team of experienced CPAs, attorneys, engineers, and technology experts helps companies save money and create cash flow with R&D tax credits that can then help drive overall growth.