Instructions For Arizona Form 308 - Research And Development Expenses Credit

Arizona Form 308

Total computed research credit (BRP +

Allowable Research Credit

418,000.00

QRE)

Total computed research credit (BRP +

This is the second taxable year in which Corporation R is claiming the

19,000.00

QRE)

credit, and, therefore, the maximum allowable credit is $ 250,000.00.

This is the first taxable year in which Corporation L is claiming the

Maximum allowable credit (BRP + QRE)

250,000.00

credit, and, therefore, the maximum allowable credit is $ 100,000.00.

Qualified research expenses that exceed the maximum allowable credit

Maximum allowable credit (BRP + QRE)

100,000.00

in a taxable year may be carried forward for not more than 15 taxable

Qualified research expenses that exceed the maximum allowable credit

years.

in a taxable year may be carried forward for not more than 15 taxable

years.

Computation of Excess Qualified Research Expenses

Subject to Carryforward

Computation of Excess Qualified Research Expenses

Maximum

allowable

credit

(Qualified

Subject to Carryforward

$ 250,000.00

research expenses of $1,250,000 x .20)

Maximum

allowable

credit

(Qualified

$ 100,000.00

Qualified research expenses in excess of

research expenses of $500,000 x .20)

base amount (excess BRP of $900,000 +

$ 2,090,000.00

Qualified research expenses in excess of

95,000.00

excess QRE of $1,190,000)

base amount (excess QRE of $95,000)

Qualified research expenses used to

1,250,000.00

500,000.00

compute maximum allowable credit

QRE in excess of maximum allowable credit

$ 840,000.00

QRE in excess of maximum allowable credit

0.00

Corporation L does not have any excess qualified research expenses in

Corporation R has $840,000 of excess qualified research expenses in

the taxable year ending December 31, 1999.

the taxable year ending March 31, 2000, that are available to be carried

forward for use in computing the maximum allowable credit in

Line 46 -

succeeding taxable years.

Enter the qualified research expenses in excess of the base

EXAMPLE 2:

Corporation L incurs $700,000 in qualified

amount (the amount from Part I, line 15).

research expenses and $300,000 in basic research payments

Line 47 -

for the taxable year ending December 31, 1999. This is the

first taxable year in which Corporation L is claiming the

Enter the total qualified research expenses used to compute

credit and, therefore, the maximum allowable credit for this

the maximum allowable credit for the current taxable year. If

taxable year is $100,000.

this is the first taxable year in which a taxpayer is claiming

the credit, enter $500,000. If this is the second taxable year

The basic research payment credit computation and the

in which a taxpayer is claiming the credit, enter $1,250,000.

qualified research expense credit computation, as provided

If this is the third taxable year in which a taxpayer is

by IRC § 41, are shown separately in an abbreviated format

claiming the credit, enter $2,000,000. For each taxable year

for ease in illustration of the excess qualified research

after the third taxable year in which a taxpayer claims the

expense computation.

credit, enter $2,500,000.

Basic Research Payment (BRP) Credit Computation

Line 48 -

Basic research payments

$ 300,000.00 **

Subtract the amount on line 47 from the amount on line 46.

Qualified organization base period amount

450,000.00

Enter the difference. This is the amount of excess qualified

Excess BRP

0.00

research expenses for the current taxable year that is

.20

available to be carried forward by the taxpayer.

Computed BRP credit

0.00

** The $300,000 of basic research payments are treated as contract

Part IV - Computation of Excess Qualified

research expenses for the qualified research expense credit

Research Expenses for Current Taxable Year

computation as provided by IRC § 41.

for Alternative Credit Computation

Qualified Research Expense (QRE) Credit Computation

Complete this section if the alternative computation tentative

credit for current taxable year qualified research expenses

Qualified research expenses

$ 700,000.00

(Part II, line 43) is greater than the maximum allowable

Contract research expenses (65%)

195,000.00

credit for the current taxable year (Part II, line 44).

Total QRE

895,000.00

Qualified research expenses that exceed the maximum

Base amount

800,000.00

allowable credit in a taxable year may be carried forward for

Excess QRE

95,000.00

not more than 15 taxable years.

.20

The amount of qualified research expenses in excess of the

Computed QRE credit

19,000.00

maximum allowable credit is determined by subtracting the

total qualified research expenses used to compute the

Instructions For Arizona Form 308 - Research And Development Expenses Credit - 1999 Page 5

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