With the passing of the Illinois budget on July 6, 2017, the Illinois state R&E Tax Credit was reinstated. The Illinois R&E Tax Credit expired for tax years that ended after December 31, 2015. The state credit is retroactive to include 2016 and can be carried forward five years.
The state credit can significantly impact the potential benefit. Let’s use an Illinois manufacturing client as an example that in 2016 had $2.7 million in qualified research expenditures. The manufacturing client obtained $157,000 in federal benefit in 2016 and can now retroactively claim the Illinois state credit and potentially procure $46,000 in additional state credits.
Contact McGuire Sponsel if you have any questions or need insight on whether your clients may qualify for the R&D Tax Credit.