Ohio Research and Development Tax Credit Summary

The Ohio R&D Investment Tax Credit is nonrefundable against the Commercial Activity Tax. It defines Qualified Research Expenditures the same as the federal version but does have some differences. Below are some of the differences between the federal and the Ohio R&D Tax Credit:

  • The Ohio R&D Investment Tax Credit is 7% of the qualifying expenditures
  • Ohio follows Federal Alternative Simplified Calculation only which averages the prior three years of Qualified Research Expenditures as its base period
  • The Ohio R&D Investment Tax Credit can be carried forward up to seven years

Ohio R&D Tax Credit Case Study

An Ohio custom door and lock Company had never before claimed the R&D credit for the development activities employees. This project involved a four year study with a three year look back to claim credits for years 2010 through 2013. The Company qualified for the federal R&D Tax Credits of $338,649 and an additional $64,859 in Ohio state R&D Investment Tax Credit. Summary of credits:

FEDERAL OHIO
Year Total QREs Credit Total QREs Credit
2013 $1,362,580 $88,568 $1,362,580 $28,651
2012 1,025,759 66,674 1,025,759 11,508
2011 965,404 96,540 965,404 13,476
2010 868,670 86,867 868,670 11,224
Total $4,222,413 $338,649 $4,222,413 $64,859

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