New Hampshire R&D Tax Credit

Research and development are crucial aspects of modern business. R&D allows firms to make new products, processes, and services. It also helps them create new formulas for existing products to keep them innovative. In order for companies to invest more time and money into research and development, states have implemented R&D tax credits as incentives, and New Hampshire is no exception.

But unlocking the potential of your New Hampshire company’s innovation can be challenging, especially if you’re working with limited capital. For this reason, it would be wise to learn more about the New Hampshire R&D tax credit.

New Hampshire Research and Development Tax Credit Explained

The credit is equivalent to 10% of eligible R&D salary expenses in New Hampshire for the taxable year. Salaries this credit covers do not qualify for the ERZTC (RSA 162-N:7).

The maximum New Hampshire research tax credit amount available to all taxpayers is $7 million a year. Moreover, every taxpayer’s credit portion cannot exceed a yearly $50,000 cap. You must also utilize the credit to offset the tax liability over the next five years.

So far, every year, the amount sought by all petitioners has surpassed the authorized award limit of $7 million. For this reason, the required amounts get prorated for all candidates who apply on time.

The Process

All petitioners must provide a copy of Form 6765 together with their DP-165 application. However, if your federal return isn’t yet due or you are petitioning for an extension that conflicts with the deadline, you should send a draft or pro forma copy of Form 6765. Otherwise, your application will not be accepted.

The Commissioner will decide on the granted amount by September 30. By the same date, you will receive a notification about your award amount by mail.

So, when filing and claiming the incentive on Form DP-160, don’t forget to attach this letter to your company tax return. By doing so, you will be able to claim the Department-granted credit against business taxes liability within the following five tax years in which you conducted qualifying manufacturing QREs.

The credit is applied first to the Business Profits Tax. Any remaining funds may be allocated to the Business Enterprise Tax.

How to Calculate New Hampshire Research Tax Credit

The credit equals 10% of qualifying R&D salary expenditures in New Hampshire (WQREs). However, the total yearly sum can’t exceed $50,000.

New Hampshire Research and Development Tax Credit: Takeaway

The New Hampshire R&D Tax Credit provides taxpayers with a permanent credit for research and development against business profit and business enterprise taxes. The credit is available for eligible manufacturing R&D expenditures made or incurred in New Hampshire throughout the fiscal year.

FAQs

What kind of companies can apply for an R&D tax credit in New Hampshire?

Partnerships, LLCs, S-Corporations, C-Corporations

What is the deadline for applying for an R&D tax credit in New Hampshire?

You must submit Form DP-165 by June 30 through an online portal.

What data do I need to calculate credit an R&D tax credit in New Hampshire?

Claim period New Hampshire QREs (Qualified R&D Expenses)

What information do I need to provide to file an R&D tax credit in New Hampshire?

Federal Form 6765

Is credit carryforward an option in New Hampshire?

Yes, up to five years.