Idaho State R&D Tax Credit
There is a tax credit available against the Idaho corporation income tax for increasing research activities in Idaho. Research must be conducted in Idaho to qualify for this credit.
The credit is the sum of:
- 5% of the excess of qualified research expenses for research conducted in Idaho over the base amount; and
- 5% of the basic research payments allowable under IRC § 41(e)for basic research conducted in Idaho
The base amount is the amount calculated under IRC § 41(c) and IRC § 41(h) except that:
- a taxpayer’s gross receipts include only those receipts attributable to sources within Idaho as provided in Idaho Code §63-3027(q)and Idaho Code §63-3027(r); and
- a taxpayer may elect to be treated as a start-up company under IRC § 41(c)(3)(B), regardless of whether the taxpayer meets the requirements of IRC § 41(c)(3)(B)(i)(I)or IRC § 41(c)(3)(B)(i)(II). A taxpayer cannot revoke an election to be treated as a start-up company
The amount of the credit, along with the amount of any credits carried forward, cannot exceed the amount of tax due after allowance for all other income tax credits permitted. If credits earned in more than one tax year are available, the oldest credits must be applied first.
How to obtain the credit?
To use this credit, fill out Idaho Form 67. Taxpayers must also keep and make available, on request, records and verification that:
- the research was conducted in Idaho
- wages included in the computation were for qualified service performed by an employee in Idaho
- supplies included in the computation were used for research conducted in Idaho
- contract research expenses were for research conducted in Idaho
- the research activities meet the definition of qualified research; and
- the amounts included in the Idaho computation are includable in the computation of the federal credit allowed by IRC § 41
Refundable/Transferable Tax Credit – No
The credit can be claimed for the tax year during which the taxpayer qualifies for the credit. If the credit exceeds the limitation, the excess amount may be carried forward for up to 14 tax years.
Find out if you qualify for the R&D tax credit
States and the R&D Credit: