Oops! Something went wrong while submitting the form.
The Utah Research and Development Tax Credit, governed by Utah Code § 59-7-612 for corporations and § 59-10-1012 for individuals and pass-through entities, and administered by the Utah State Tax Commission, encourages innovation by providing a nonrefundable credit for qualified research activities conducted within the state. This credit combines an incremental component with a volume-based element, allowing businesses to offset Utah income tax liabilities while stacking with federal R&D credits under IRC § 41.
Eligibility requires conducting qualified research activities (QRAs) in Utah that align with federal IRC § 41 standards, focusing on technological uncertainty in product or process development. Businesses must apportion QREs to Utah based on activities performed in-state.
Utah employs a hybrid approach: an incremental method (5% on excess QREs over base, plus 5% on excess basic research payments) and a volume method (7.5% on total current-year Utah QREs). The incremental and basic research credits carry forward for 14 years if unused; the volume credit must be used in the current year or lost. Both use QREs for qualified research conducted in Utah only. Utah allows taxpayers to compute the base using the regular or Alternative Simplified Credit (ASC) method under IRC section 41(c), but Utah still applies its Utah-only QRE and gross receipts rules.
Utah's R&D credit features a unique three-component structure to reward both growth (incremental and basic research) and sustained investment (volume), differing from purely incremental federal rules.
Utah's Research and Development Tax Credit under § 59-7-612 (corporate) and § 59-10-1012 (individual/pass-through) offers 5% on incremental QREs over base plus 5% on excess basic research payments and 7.5% on current Utah QREs, promoting innovation in tech, manufacturing, and life sciences while aligning with federal IRC § 41.
Activities must involve technical uncertainty in developing or improving products, processes, or software conducted in Utah, such as algorithm optimization or prototype testing; excludes routine data collection or market research. Strike Tax verifies eligibility.
For $1 million in Utah QREs with $500,000 excess over base, you could save $102,500 ($25,000 incremental + $2,500 basic research + $75,000 volume), stackable with federal credits. Use Strike Tax’s R&D Credit Calculator for estimates.
Nonrefundable, but incremental and basic research credits (5%) carry forward 14 years; volume credits (7.5%) expire if unused. Strike Tax optimizes carryforward strategy.
There is no separate R&D credit form. Individuals claim the credit on Form TC-40 with TC-40A using code 12. Corporations claim it on Form TC-20 using the “Credit for Increasing Research Activities in Utah” line (code 12). Partnerships and LLCs report at the entity level on TC-65 and pass credits to owners on Schedule K-1. Maintain federal-style documentation. Strike Tax handles filing and compliance.
Yes, stack Utah credits with federal IRC § 41 for the same QREs, maximizing savings on Utah-apportioned expenses. Strike Tax coordinates dual claims.
Base = fixed-base percentage × average Utah GR for prior 4 years (min. 50% current QREs); startups start at 3% for first 5 years. Strike Tax computes accurately.
7.5% of total current-year Utah QREs, no base required—use it or lose it in the current year for immediate offsets.
There are no major 2025 changes to Utah’s R&D credit itself. HB 264’s 2025 tax changes instead focus on renewable and clean energy credits, tightening eligibility and phasing those incentives out over future years. Federal updates (e.g., Form 6765 enhancements) require stronger documentation, benefiting aligned Utah claims. Strike Tax navigates these.
Three-component structure rewards both growth and volume, with 14-year carryforward for scaling startups; high utilization in software/IT. Strike Tax tailors for Utah tech.
Strike Tax ensures Utah-specific apportionment, maximizes three-component credits, and provides audit-ready documentation for seamless claims.
Use our calculator to estimate your potential federal and state benefits
Schedule a consultation to structure your row crop research activities
Connect with us to find out how R&D tax credits can boost your organization’s bottom line.
Utah provides a Research and Development Credit which closely follows IRC § 41. The credit amount is a combination of the following calculations:
Note: You may carry forward any credit for #1 or #2 (above) that exceeds your tax liability for 14 years. You may not carry forward any credit as calculated for #3.
Learn more about Utah's R&D Tax Credit law from the state tax code here and Utah Income Taxes.
R&D Tax Credit Available:
Yes
Eligible Entities:
C-Corporation, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Due with Utah Tax Return
Data Required to Compute Credit:
Claim Period Utah Qualified R&D Expenses (QREs)
Utah Gross Receipts for Prior 4 Years
What Information is needed?
Utah QREs for Prior 3 Years
Utah Gross Receipts for Prior 4 Years
Credit Carryforward?
14 Years for comparative credit amounts (No carryback)
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.
Utah's Research and Development Tax Credit under § 59-7-612 (corporate) and § 59-10-1012 (individual/pass-through) offers 5% on incremental QREs over base plus 5% on excess basic research payments and 7.5% on current Utah QREs, promoting innovation in tech, manufacturing, and life sciences while aligning with federal IRC § 41.
Activities must involve technical uncertainty in developing or improving products, processes, or software conducted in Utah, such as algorithm optimization or prototype testing; excludes routine data collection or market research. Strike Tax verifies eligibility.
For $1 million in Utah QREs with $500,000 excess over base, you could save $102,500 ($25,000 incremental + $2,500 basic research + $75,000 volume), stackable with federal credits. Use Strike Tax’s R&D Credit Calculator for estimates.
Nonrefundable, but incremental and basic research credits (5%) carry forward 14 years; volume credits (7.5%) expire if unused. Strike Tax optimizes carryforward strategy.
There is no separate R&D credit form. Individuals claim the credit on Form TC-40 with TC-40A using code 12. Corporations claim it on Form TC-20 using the “Credit for Increasing Research Activities in Utah” line (code 12). Partnerships and LLCs report at the entity level on TC-65 and pass credits to owners on Schedule K-1. Maintain federal-style documentation. Strike Tax handles filing and compliance.
Yes, stack Utah credits with federal IRC § 41 for the same QREs, maximizing savings on Utah-apportioned expenses. Strike Tax coordinates dual claims.
Base = fixed-base percentage × average Utah GR for prior 4 years (min. 50% current QREs); startups start at 3% for first 5 years. Strike Tax computes accurately.
7.5% of total current-year Utah QREs, no base required—use it or lose it in the current year for immediate offsets.
There are no major 2025 changes to Utah’s R&D credit itself. HB 264’s 2025 tax changes instead focus on renewable and clean energy credits, tightening eligibility and phasing those incentives out over future years. Federal updates (e.g., Form 6765 enhancements) require stronger documentation, benefiting aligned Utah claims. Strike Tax navigates these.
Three-component structure rewards both growth and volume, with 14-year carryforward for scaling startups; high utilization in software/IT. Strike Tax tailors for Utah tech.
Strike Tax ensures Utah-specific apportionment, maximizes three-component credits, and provides audit-ready documentation for seamless claims.
