As the weather turns warmer and our thoughts turn to summer, we would like to remind you that some businesses who apply and receive federal research and development credits may qualify for the New Hampshire Research and Development (R&D) Tax Credit. Qualifying businesses must complete the R&D application Form DP-165 with the required Federal Form 6765 attached by June 30 following the tax year during which the R&D occurred. Once applicants have successfully submitted a complete application with the required documentation, a confirmation of receipt will be sent to the applicant’s contact and mailing address as it appears on the application. If the application is not complete, the applicant will be notified.
The credit is based upon 10% of the excess of the qualified R&D expenses for the taxable year over a base amount. “Qualified manufacturing research and development” expenditures are wages paid to employees of the business organization for services rendered in New Hampshire which qualify and are reported as a credit by the business organization under section 41 of the Internal Revenue Code. More specifically, “qualified manufacturing research and development” expenditures are the wage amounts attributable to New Hampshire that make up lines 5 or 24 of the business organization’s Federal Form 6765.
Each taxpayer’s share of the R&D tax credit shall not exceed $50,000 per fiscal year. Each credit shall be used to offset the taxpayer’s tax liability within the subsequent 5 tax years. A determination of the award amount will be made by the Commissioner no later than September 30. Applicants will be notified, by mail, of award amounts granted to them by September 30. Taxpayers must attach a copy of the R&D award letter to their business tax return when they file and claim the credit on the DP-160 and/or the BET return.
For the information above and additional information, taxpayers can contact us with questions or visit https://www.revenue.nh.gov/assistance/research-tax-credit.htm