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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.
Strike will keep Minnesota clients updated about this potential R&D tax law change.
Learn more about Minnesota's current R&D Tax Credit law here.
R&D Tax Credit Available:
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
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.