Florida R&D Tax Credits

Florida provides a Research and Development Tax Credit for certain QREs incurred in Florida. The credit amount is 10% of the excess qualified research expenses over a specified base amount. The credit is claimed using Florida Form F-1120 AND an application must be submitted online during the March application window.

Corporations, as defined in s. 220.03, F.S., that also meet the definition of a qualified target industry business (QTIBs), as defined in s. 288.106(2)(n), F.S., may complete the online application. However, only QTIBs in the manufacturing, life sciences, information technology, aviation and aerospace, homeland security and defense, cloud information technology, marine sciences, materials science, and nanotechnology industries may qualify for a tax credit.

A corporation applying for the tax credit must include a letter from the Department of Economic Opportunity certifying that it is an eligible QTIB with its application.

Businesses that are partnerships, LLCs taxed as partnerships, or disregarded single member LLCs are not corporations under Section 220.03, F.S., and, therefore, may not apply for an allocation of credit. However, each corporate partner of a partnership may apply separately for an allocation of credit based on the corporation’s separate research expenses, including allocated partnership research expenses, if the corporate partner is also a qualified target industry business.

For disregarded entities, the corporation that owns the single member limited liability company may apply separately for an allocation of credit based on the corporation’s separate research expenses, including those of the disregarded single member LLC, if the corporate owner is also a QTIB.

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Learn more about Florida's R&D Tax Credit laws or here on this Florida state government website.

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R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporations only

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Deadline for Tax Filing:

Online Application completed between March 20 - March 26 of each tax year (dates may vary by year).

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Data Required to Compute Credit:

Claim Period Qualified R&D Expenses (QREs)

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What Information is needed?

QREs for Prior 4 Years

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Credit Carryforward:

5 Years

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The R&D tax credit equals:

• 10% of the excess of the Florida QREs over the base amount.
• The base amount is calculated as the average of Florida QREs for the prior four taxable years.

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Specific Items to Note:

• FL Research Credit is only available to Corporations that meet the definition of qualified target industry business, as defined in s. 288.106(2)(n).
• The Florida credit is limited to 50% of a taxpayer's tax liability.
• The taxpayer must claim a federal R&D credit in order to claim a Florida credit. A corporation applying for the tax credit must include a letter from the Department of Economic Opportunity certifying that it is an eligible QTIB with its application.
• The credit amount is capped at $9 million.  If the state credit cap is reached, the credits are allocated on a prorated basis to those corporations that completed a valid application.
  
• For 2019 (the 2020 application window), 127 applications were approved with each applicant receiving an allocation of the available $9 million credit cap. Each applicant received approximately 8.8% of the amount of credit determined in their application. These 127 applications requested $101,741,648 in total credits from Florida.