Arizona offers both refundable and non-refundable credits in addition to the Federal R&D tax program:
- The 2011 through 2022 R&D tax credit is equal to 24% of the first $2.5 million in qualifying expenses plus 15% of the qualifying expenses in excess of $2.5 million.
- For 2023 and thereafter, the tax credit rates will be 20% of the first $2.5 million in qualifying expenses plus 11% of the qualifying expenses in excess of $2.5 million.
- Unused credits can be carried forward up to 15 years.
- In order to qualify for the refundable portion of the tax credit, a Company must qualify for the regular tax credit and employ less than 150 full-time employees.
- The refundable amount is 75% of the excess of the allowable credit that exceeds the taxpayer’s tax liability. Any excess amounts of credits are waived.
- Arizona has capped the refundable amounts to $5 million in any calendar year.
We know that this program can seem complicated for first-time claimers so we attempted to simplify it into an easy-to-read infographic.
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