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Unadjusted Credit Example: Fewer Than 250 Employees, Standard Credit & Michigan Research University Credit Reach Maximums

Unadjusted Credit Example: Fewer Than 250 Employees, Standard Credit & Michigan Research University Credit Reach Maximums

An eligible business with fewer 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

Caluclation

Standard credit = (3% × $3,000,000) + (15% × ($4,200,000 − $3,000,000))
= $90,000 + (15% × $1,200,000)
= $90,000 + $180,000
= $270,000
Maximum standard credit for small employers: $250,000

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

Unadjusted credit = $250,000 + $200,000 = $450,000

Additional Examples

MQREs Exceed Base Amount

MQREs Do Not Exceed Base Amount

Standard Credit Reaches Maximum

Michigan Research University Credit

Base Amount is Zero (No Prior MQREs)