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Unadjusted Credit Example: 250 or More Employees, Michigan Research University Credit Reaches Maximum

An eligible business with more than 250 employees is claiming the Research and Development (R&D) Tax Credit and needs to calculate its unadjusted credit for the current expense year.

Inputs

Calculation

Standard credit = (3% × $3,000,000) + (10% × ($4,500,000 − $3,000,000))
= $90,000 + (10% × $1,500,000)
= $90,000 + $150,000
= $240,000

Michigan research university credit = 5% × $4,100,000 = $205,000
Maximum Michigan research university credit: $200,000

Unadjusted credit = $240,000 + $200,000 = $440,000