There is no Alaska R&D state tax credit program. Alaskan businesses can receive a credit of 7-10% for QRE from the federal government.
Nearly every state has a research and development (R&D) tax credit program to incentivize businesses to invest in R&D. Alaska R&D tax credits, however, are harder to come by. Keep reading for answers to your R&D tax credit questions and discover how you can secure this resource for your business.
Are Alaska R&D Tax Credits Available?
Innovative businesses in the Last Frontier can’t take advantage of a state R&D tax credit program as one doesn’t exist. Of course, Alaskan business owners can participate in the federal R&D tax credit program.
What Determines Eligibility for the Federal R&D Tax Credit Program?
Businesses across the country can apply for a R&D tax credit from the federal government, but there are requirements you will need to meet. So, do you qualify for an R&D tax credit? You can apply for this credit if your company:
- Developed a new product/process and/or improved upon existing functionality
- Encountered a level of uncertainty in the development process
- Put into practice a process of experimentation to eliminate uncertainty
- Conducted experimentation that relied on either engineering, biological, physical, or computer science
- Employed all or a portion of your workers within the United States
After determining your eligibility, you will need to identify your company’s qualified research expenditures (QRE). Once that has been accomplish, you can estimate what your total credit will be.
What Are QRE?
You may think that many different activities could count as QRE but that isn’t the case. Companies many only list these items as QRE:
- The salaries of your full/part-time U.S.-based employees taking part in R&D
- A percentage of any 3rd party U.S.-based contractors hired for R&D
- Disposable supplies purchased for your company’s R&D
Innovative Alaskan companies can expect to receive 7-10% of their total QRE in the form of a credit. How the credit can be applied will be determined by a few details like your company’s revenue for the filing year.
What You Need to Know About Alaska R&D Tax Credits
Unfortunately, business owners in Alaska can’t claim an R&D tax credit from the state. The federal government, however, does offer an R&D tax credit program to any American business that qualifies. Qualifying companies could gain a credit that’s 7-10% of applicable QRE.
Contact us at Bowers R&D today to get the credit you’ve earned.