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Base Amount Example: No Prior MQREs

Base Amount Example: No Prior MQREs

Example Explanation

A business is applying for the Research and Development (R&D) Tax Credit in Year 12 and needs to calculate its base amount to determine eligibility:

  1. Determine MQREs for the three prior calendar years:
    1. Year 9: $0
    2. Year 10: $0
    3. Year 11: $0
  2. Add the MQREs from the years with expenses.
    1. Since there were no years with MQREs, this is not applicable.
  3. Divide the total by the number of years with MQREs.
    1. Since there were no years with MQREs, the base amount is $0.

To Qualify For the Credit

To qualify for the R&D Tax Credit in Year 12, the business’s MQREs must exceed its base amount of $0.

Additional Examples

MQREs in All Years

One Year Had No MQREs