A Pittsburgh start-up laboratory engaged McGuire Sponsel for a current year R&E tax credit study. The company was started in order to develop processes and chemicals for enhancing oil recovery from the ground. They had major growth and research investments in 2018 and were able to benefit from this growth significantly as the research and experimentation tax credit rewards companies for increasing research expenditures.
McGuire Sponsel identified the qualified research expenditures associated with employee wages, supplies expenses, and outside contractors assisting the company with qualified research. In the end, McGuire Sponsel calculated a federal credit of $44k and an additional $49k in Pennsylvania state credits, exceeding projections by $75k. The company was able to use the federal and Pennsylvania credits to offset its federal and state income tax liability, which will help it to continually invest in its growth for the future.