Rhode Island R&D Tax Credit Summary

Rhode Island R&D tax credit, R&D Tax Credit

Rhode Island State R&D Tax Credits

There are two credits available in Rhode Island: Research and development property credit and the qualified research expense credit.

Rhode Island State R&D Property Credit

Refundable Tax Credit – No

Taxpayers are allowed a credit against business corporation, gross premiums tax, or personal income tax for tangible research and development property.

  • The amount of the credit is 10% of the cost or other basis for federal income tax purposes of tangible personal property, and other tangible property, including buildings and structural components of buildings, acquired constructed, reconstructed, or erected after July 1, 1994
  • The credit is allowed in the year the property is first placed in service, which is the earlier of: the year the taxpayer begins depreciation of the property; or the year that the property is made ready and available for a specifically assigned function
  • The credit can not reduce the tax of a corporation to less than the $250 minimum tax

To qualify for the credit the property must:

  • be depreciable under IRC §167 or recovery property for which a deduction is allowable under IRC §168
  • have a useful life of three years or more
  • be acquired by purchase as defined in IRC §179(d)
  • be located in Rhode Island; and
  • be used principally for purposes of research and development in the experimental or laboratory sense [R.I. Gen. Laws §44-32-2(b)]

Carryforward 

Any credit not used can be carried forward for up to seven years.


Rhode Island State R&D Expense Tax Credit

Refundable Tax Credit – No

The Rhode Island Research & Development Expenses credit is available to C corporations, sole proprietorships, partnerships, joint ventures, or S corporations.

  • The credit is equal to 22.5% of expenses up to $111,111 and 16.9% for the remaining expenses over $111,111
  • Expenses must have been incurred in Rhode Island after July 1, 1994
  • The credit amount taken in any one taxable year may not exceed 50% of the company’s remaining tax liability after all other credits have been applied
  • The credit allowed shall only be allowed against the tax of that corporation included in a consolidated return that qualifies for the credit and not against the tax of other corporations that may join in the filing of a consolidated return

Carryforward

Any credit not used can be carried forward for up to seven years.

Flow-Through Entities

A credit is available to corporations, sole proprietors, or passed through from partnerships, joint ventures or subchapter S corporations for qualified research expenses.

How to obtain the credit? 

File Form RI-7695E

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.
FIND OUT MORE TODAY

 

States Offering R&D Credit:

                             States Without R&D Credit

Alabama
District of Columbia
Missouri
Montana
Nevada
Oklahoma
South Dakota
Tennessee
Washington
West Virginia
Wyoming