Utah State R&D Tax Credit
Utah offers a tax credit for research activities conducted in Utah, detailed within Utah Code Section 59-10-1012.
Refundable Tax Credit – No
The credit amount equals the sum of the following three expenses:
- a research tax credit of 5% of the taxpayer’s qualified research expenditures for the current taxable year exceeding the base amount
- a 5% credit for payments to qualified organizations for basic research as provided in IRC §41(c) for the current taxable year that exceed the base amount; and
- effective retroactive to taxable years beginning on or after January 1, 2012, a tax credit of 7.5% of qualified research expenses for the current taxable year (9.2% for taxable years beginning on or after January 1, 2010 and before January 1, 2012; 6.3% for 2009; and 5% for 2008)
The base amount is calculated as provided in IRC §41(c) and IRC §41(h), except that:
- it does not include the alternative incremental credit provided for in IRC §41(c)(4)
- the taxpayer’s gross receipts include only those amounts attributable to Utah sources under the allocation and apportionment provisions; and
- for purpose of calculating the base amount, a taxpayer may make an irrevocable election to be treated as a start-up company regardless of whether the taxpayer meets the requirements of IRC §41(c)(3)(B)(i)(I) or IRC §41(c)(3)(B)(i)(II)
For the first two amounts above, any excess credit not used for the taxable year in which it is earned may
be carried forward as a credit for the next 14 taxable years. Any unused credit under the third amount above
may not be carried forward.
How to obtain the credit?
The credit amount should be entered on Utah Form TC-40A, Income Tax Supplemental Schedule, Part 4, using code 12.
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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