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Connect with us to find out how R&D tax credits can boost your organization’s bottom line.
The State of Minnesota, under 290.068, offers a Credit for Increasing Research Activities, a nonrefundable tax credit for all qualifying R&D activities. The credit calculation mirrors that of the federal R&D tax credit. Taxpayers may claim a credit against the corporate income or franchise tax equal to the sum of:
The credit may be carried forward up to 15 years but never carried back. To calculate the gross receipts for Minnesota, the average annual gross receipts and aggregate gross receipts must be calculated under Minnesota sales and receipts statute 290.191. Additionally, even if a company has zero gross receipts in Minnesota, they may still claim the credit and carry it forward.
Two different bills were introduced in 2022, SF 2970 and HF 3316. Both bills would provide different methodologies for the tax credit to be calculated, basing calculations on the Alternative Simplified Credit methodology. If one of these bills is passed, taxpayers would only need to substantiate QREs for the current and previous three taxable years. These bills have been tabled in committee, but provide a hint of where Minnesota R&D tax law could go.
Strike will keep Minnesota clients updated about potential R&D tax law changes.
Learn more about Minnesota's current R&D Tax Credit law here.
R&D Tax Credit Available:
Yes
Eligible Entities:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Due with Minnesota Tax Return
Data Required to Compute Credit:
Claim Period Federal Qualified R&D Expenses (QREs)
What Information is needed?
Minnesota Sales & Receipts for Prior 4 Years
Federal Form 6765
Credit Carryforward:
15 Years
No Carryback provision
To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.
Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.
The Minnesota R&D tax credit is 10% of qualified research expenses up to $2 million, and 4% on expenses above that, with partial refundability at 19.2% for 2025. Contact Strike Tax to maximize your savings.
Activities must meet federal IRC § 41 criteria and be conducted in Minnesota, including developing products or improving processes with experimentation. Strike Tax can identify qualifying projects.
Yes, startups can claim the credit, and the federal R&D credit with payroll tax offsets up to $500,000 per year for up to five years if gross receipts are under $5 million; partial refund ideal for cash flow. Strike Tax can guide eligibility.
Maintain contemporaneous records like project notes, time logs, expense receipts for wages, supplies, and contracts. For 2025, Form 6765 requires Section G for business component details on claims over $10,000. Strike Tax ensures audit-ready documentation.
File with your state tax return; elect refund if applicable. For federal, file Form 6765. Strike Tax streamlines the process.
Refundability rate at 19.2% for excess liability; proposed changes under HF 5247, but no major 2025 state changes; federally, Form 6765 adds Section G, and Section 174 restores full expensing. Strike Tax can help navigate these updates.
