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Case Studies

Case Study #5

Technology / Payment Processing Company

Research & Development Tax Credit

Case Study #5 | Research & Development Tax Credit | Technology/Payment Processing Company

Overview:
The client is a technology company that develops payment solutions for merchants and developers. The company has invested heavily in technology, algorithms and other intelligence tools. The investments had been made through leveraging existing personnel as well as contracting work through a third party developers and engineers.

Challenge:
The company’s significant investment in technology, personnel, sales and marketing activity were incremental and did not have the internal resources to research available government incentives. Every time the company tried to take the time to identify government programs, there were other projects that demanded priority.

Solution:
Economic Incentives Advisory Group (EIAG) met with the leadership group of the organization. It was quickly determined there as six-figures of tax refunds available to the client. Key personnel were interviewed and prior expenses were identified that qualified for federal and state tax credits.

Results:
The client was able to receive a very significant refund check. Additionally, a process was created to efficiently track future qualified expenses so that the company could continue to receive the economic benefit from this program. The company’s profitability has improved as a result of claiming this credit.

Case Study #6

Startup IT Company 

Research & Development Tax Credit

Case Study #6 | Research & Development Tax Credit | Startup IT Company

Overview:
A start-up software company with an innovative technology in the education space was growing rapidly. Engineers, researchers and other professionals are joining the company monthly to grow the solutions and overall enterprise.

Challenge:
There is a tremendous investment being made in developing and advancing the technology. There are constant enhancements, customization, research and new product development occurring weekly. The investment being made in salaries, software and hardware are constant. The challenge is the company is reinvesting profits back into the company, and there will not be a tax liability in the near future. Traditional tax credit programs available are of little value.

Solution:
Economic Incentives Advisory Group (EIAG) was able to introduce a newly revised version of the Research and Development (R&D) Tax Credit to the client. The client, commencing in 2017, is now able to claim the qualified R&D expenses and apply them towards the payroll taxes. Even companies that do not have a tax liability can benefit from this program by reducing payroll by up to 6.2%, which is the employer’s portion of payroll taxes.

Results:
Starting in 2017, the company will be able to reduce its payroll by up to $250,000 per year – for a period of up to 5 years. This will significantly reduce the client’s operations expenses and allow them to continue to invest in their company. Additionally, the client will be able to continue to dedicate personnel to core job functions, and allow EIAG to administer this program.

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