The New Hampshire Research & Development (R&D) Tax Credit Program

The New Hampshire Research and Development Tax Credit Program was established in 2007 by Senate Bill 134 (Chapter 271, Laws of 2007) Through FY2013, the maximum credit allowed for all taxpayers was $1,000,000 per fiscal year. The annual limit was increased to $2,000,000 in FY2014, and then to $7,000,000 in FY2017. The credit is based upon 10% of the excess of the qualified R&D expenses for the taxable year over the base amount. Wages for which a credit is taken shall not also be eligible under the ERZTC (RSA 162-N:7). Each taxpayer's share of the R&D tax credit shall not exceed $50,000 per fiscal year. Each credit shall be used to offset the taxpayer's tax liability within the subsequent 5 tax years.

• What are qualified R&D expenses?
• Can a unitary or combined business filer take the credit?
• When is the R&D application due?
• What if your federal return is not due yet?
• When are applicants notified of the R&D award amounts?
• How do I claim the R&D Tax credit?
• What happens if the amount requested by all applicants exceeds the allowable award amount for the year?
• Who do I contact with questions?
• Technical Information Release
• Statute
• Rules
• Forms
• Research & Development Tax Credit Summary

What are qualified R&D expenses?

"Qualified manufacturing research and development" expenditures are wages paid to employees of the business organization for services rendered in New Hampshire which qualify and are reported as a credit by the business organization under section 41 of the Internal Revenue Code. More specifically, "qualified manufacturing research and development" expenditures are the wage amounts attributable to New Hampshire that make up lines 5 or 24, of the business organization's Federal Form 6765.

Can a unitary or combined business filer take the credit?

Unitary businesses and enterprises consisting of more than one taxpayer shall be considered a single taxpayer for purposes of claiming the credit.

When is the R&D application due?

Taxpayers must postmark their complete R&D application Form DP-165 with the required Federal Form 6765 attached, by June 30 following the tax year during which the R&D occurred. Once applicants have successfully submitted a complete application with the required documentation, a confirmation of receipt will be sent to the applicant's contact and mailing address as it appears on the application. If the application is not complete, the applicant will be notified.

What if your federal return is not due yet?

All applicants must attach a copy of their Federal Form 6765 with the DP-165. If your federal return is not due yet or you are filing on extension which interferes with the June 30 deadline, please submit a pro-forma or draft copy of your Form 6765. This must be submitted with the application or it will be considered incomplete.

When are applicants notified of the R&D award amounts?

A determination of the award amount will be made by the Commissioner no later than September 30. Applicants will be notified, by mail, of award amounts granted to them by September 30. Taxpayers must attach a copy of the R&D award letter to their business tax return when they file and claim the credit on the DP-160 and/or the BET return. Business Tax Forms may be obtained by visiting www.revenue.nh.gov/forms/business-tax.htm.

How do I claim the R&D Tax credit?

The R&D tax credit is first applied to the BPT and, while this is not a "cascading" tax credit, the unused portion of any R&D tax credit shall be available to apply to the BET. Taxpayers must attach a copy of the R&D award letter to their business tax return when they file and claim the credit on the DP-160 and/or the BET return. Business Tax Forms may be obtained by visiting www.revenue.nh.gov/forms/business-tax.htm. Each credit shall be used to offset the taxpayer's tax liability within the subsequent 5 tax years. The R&D Tax Credit cannot be used to offset tax liability within the same taxable period during which the qualified R&D expenses occurred.

What happens if the amount requested by all applicants exceeds the allowable award amount for the year?

The R&D Program began with a $1,000,000 annual limit. Beginning in FY2014, the maximum amount to be issued was $2,000,000 each year per SB1 . Beginning in FY2017, the maximum amount to be issued is $7,000,000 each year per HB2 Section 276:241 on page 67 . The total amount requested by all applicants has exceeded the allowable award amount during every year of the program. The requested amounts are then prorated for all applicants who filed a completed application on time. For a history of the prorated amount percentage, please refer to the Research & Development Tax Credit Summary at the bottom of this page and view the column titled, "% of Request".

Who do I contact with questions?

Please contact the R&D Program Administrator at 603-230-5061 if you have any questions or concerns regarding this program.

Technical Information Release

2015: House Bill 2 – Research and Development Tax Credit Increase

2013: New Hampshire Increases the Research and Development Tax Credit

2007: New Hampshire Research and Development Tax Credit Enacted Statute

Statute

• RSA 77-A:5, XIII Business Profits Tax
• RSA 77-E:3-b Business Enterprise Tax

Rules

• Rev 2406.05 (Research and Development Tax Credit)

Forms

Applying for the Research & Development Tax Credit Program? The NH DRA Taxpayer Portal,Granite Tax Connect (GTC), is now live. Complete and submit your Research & Development Tax Credit application, DP-165, online at https://gtc.revenue.nh.gov

The Research and Development Tax Credit Application, Form DP-165 , is available on the Department's website on the Business Tax forms page and by calling the Department's Forms Line at (603) 230-5001.

Research & Development Tax Credit Summary

R&D summary