Estimating the Present Value of R&D Tax Benefits in the United States

Brandon Pecoraro, Nicholas C. Hoffman, Martin Lopez-Daneri, Elena C. Derby, Rachel Moore and Shannon E. Sledz

No 35208, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using a panel of confidential corporate tax returns, we provide the first direct estimates of the realized present value of corporate tax benefits from R&D credits and deductions in the United States. Realized tax benefits can deviate from statutory tax benefits because firms in loss status are typically unable to fully utilize credits and deductions to offset current-year taxes and instead must carry these attributes forward. We develop a novel procedure to track the intertemporal firm-level utilization of tax attributes generated by corporate R&D spending, and find that the present value of R&D tax benefits varies substantially with firms’ loss status, age, and size. Old and large firms typically use R&D tax benefits quickly, while young firms – especially those that are small – frequently operate in loss status and use tax attributes more slowly. From 2012–2016, the average firm generated $0.41 in statutory tax benefits per dollar of R&D investment, with a realized present value of $0.36. Young and small firms in a loss position realized only $0.23 per dollar, a 44% decrease relative to the statutory benchmark.

JEL-codes: D22 H25 O30 O38 (search for similar items in EconPapers)
Date: 2026-05
Note: PR
References: Add references at CitEc
Citations:

Forthcoming: Estimating the Present Value of R&D Tax Benefits in the United States, Thomas Barthold, Elena C. Derby, Christopher P. Giosa, Nicholas C. Hoffman, Martin Lopez-Daneri, Rachel Moore, Brandon Pecoraro, Shannon E. Sledz. in Entrepreneurship and Innovation Policy and the Economy, volume 6 , Jones and Lerner. 2026

Downloads: (external link)
http://www.nber.org/papers/w35208.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:35208

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w35208
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().