Idaho R&D Tax Credits

Idaho provides a Credit for Idaho Research Activities using Idaho Form 67 for certain qualified research expenses (QREs) incurred in Idaho. The Idaho research credit is limited to the Idaho income tax after allowing all other tax credits that can be claimed before it.

The Idaho research credit conforms to the Internal Revenue Code (IRC) Section 41 definitions of QREs except that only the amounts related to research conducted in Idaho qualify for the Idaho research credit. In general, in order for an activity to qualify for the research credit, "qualified research" must meet all four of these criteria:

• Expenditures may be treated as expenses under IRC section 174;
• Activities are undertaken for the purpose of discovering information which is technological in nature;
• The application must be useful in the development of a new or improved business component of the taxpayer; and
• Substantially all activities constitute elements of a process of experimentation for a qualified purpose.

Qualified research involves only technological activities and doesn't include research in economics, business management, behavioral sciences, arts, or humanities.

Gross receipt calculations include only those gross receipts that are attributable to Idaho using the multistate corporation apportionment rules. These are referred to in the instructions as Idaho gross receipts.

The Idaho credit doesn't include the calculation of the alternative simplified credit, which is allowed in computing the federal credit.

Calculated in the same method as the federal regular credit, the Idaho credit equals 5% of the QREs in excess of the base amount (Fixed Base Percentage x 4 Prior Years' Average Annual Gross Receipts).

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Learn more about Idaho's R&D Tax Credit law or claim Idaho state R&D credits here.

R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporation, S-Corporations, LLCs, Partnerships

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Deadline for Tax Filing:

Due with Idaho Tax Return

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Data Required to Compute Credit:

Claim Period Idaho Qualified R&D Expenses (QREs)

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What Information is needed?

Gross Receipts for Prior 4 Years

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Credit Carryforward:

14 Years

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The R&D tax credit equals:

• 5% of the amount that the taxpayer's current year QREs exceed a base amount.

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Specific Items to Note:

• The ID credit does not include the calculation of the alternative simplified credit (ASC method).
• A corporation who is a member of a unitary group must claim the Idaho research credit to the extent allowable against its state income tax before it can share the credit with other members.
• Idaho Fixed Base Percent (FBP) for start-up companies includes only qualified research expenses conducted in the state and aggregate gross receipts will include only Idaho gross receipts.
• A taxpayer may elect to be treated as a Start-up Company, following the federal rules for Qualified Small Businesses (QSBs) per Section 41.