Are you a New Hampshire business that incurred Research & Development (R&D) expenses during 2022? Did you know that the application deadline for the NH R&D Tax Credit is fast approaching? Read below for the highlights of the R&D Tax Credit program and application due date.
Businesses that have “Qualified Manufacturing Research and Development” expenditures in New Hampshire are eligible to apply for the NH Research and Development (R&D) Tax Credit. Qualified manufacturing research and development expenses are wages paid to employees of business organizations for services rendered in New Hampshire that qualify for the Federal R&D credit under IRC Sec 41.
Principal features of the New Hampshire Tax Credit are:
- The credit is awarded by the New Hampshire Department of Revenue Administration.
- The credit is applied first against the Business Profits Tax, and any remaining amount is applied against the Business Enterprise Tax. Any unused credit can be carried forward for 5 years.
- The credit is the lesser of 10% of the business organization’s qualified manufacturing research and development expenditures or $50,000. Maximum amount available for award by the department is $7,000,000. In any given year, in the event that the aggregate amount of credits applied for exceeds $7,000,000, all credits for that year will be reduced proportionately.
- Business organizations may take the credit against business taxes due with the subsequent five taxable periods following the taxable period during which the qualified manufacturing research and development expenditures occurred by attaching a copy of the R&D award letter to its business tax return.
- The R&D Tax Credit Application Form DP-165 is available on the department's website.
- Applications must be postmarked no later than June 30 following the taxable period during which the research and development expenditure was incurred. Taxpayers must attach the Federal Form 6765 with the completed application. The department will send acknowledgment letters to all applicants by July 31. Applicants will be notified, by mail, of award amounts granted to them by September 30.
- If the federal return is not due yet or an extension has been filed, taxpayers must submit a proforma or a draft copy of the Federal Form 6765.
The due date for applying for the 2022 NH R&D tax credit (June 30, 2023) is fast approaching. Act now before it’s too late.
Author: Sudha Vishwanath | [email protected]
Contact Us
To learn more about the New Hampshire R&D Tax Credit or for assistance with applying for the credit, contact Withum’s R&D Tax Credit Services Team.
