Oregon State R&D Tax Credit
The Oregon Qualified Research Activities Credit sunsets for tax years beginning on or after January 1, 2018
H.B. 2066, which was enacted on August 2, 2017, extended and modified certain Oregon corporate income and excise tax credits however it did not extend the Oregon Research Activities Credit. Unused credits can be carried forward for up to five years.
Refundable Tax Credit – No
Taxpayers may claim either the credit for qualified research activities or the alternative credit in the same tax year. The credit must be determined in accordance with IRC §41 however, Oregon modifies IRC §41 as follows:
- the applicable percentage under IRC §41(a) is 5%;
- “Qualified research” and “basic research” is only research conducted in Oregon; and
- IRC §41(h) (relating to the alternative incremental credit) and IRC §41(c)(4) (relating to the termination of the federal credit) do not apply
Other important things to keep in mind are:
- The amount of the credit cannot exceed $1 million
- Effective January 1, 2014, a deduction may not be taken for the portion of expenses or payments, otherwise allowable as a deduction, that is equal to the amount of the credit claimed
- An alternative research activity credit is allowed for qualified research expenses that exceed 10% of Oregon sales
Any unused credit for the taxable year in which it is earned may be carried forward for up to five years.
How to obtain the credit?
Find out if you qualify for the R&D tax credit
SELL YOUR NOL’s AND R&D CREDITS
If your company hasn’t considered the R&D credit in the past because you have net operating losses (NOLs) and could not utilize the credit contact us today to find out which states allow you to sell your credits and losses for up to 95 cents on the dollar. Also, qualified start-up companies can now take a credit on their payroll taxes for their R&D credit, allowing your company to utilize the R&D credit immediately, even if your company does not have taxable income.
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