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Mississippi R&D Tax Credits

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Mississippi R&D Tax Credits

Find out if you qualify for R&D tax credits in Mississippi and recharge your business

While Mississippi doesn't have an R&D credit that mirrors IRC Section 41, a credit is allowed under the Strengthening Mississippi Academic Research Through Business Act ("SMART"). The credit provides for a rebate for expenses, including those from investors incurring qualified research costs subject to a research agreement and employment expenses for R&D staff.

The Academic Research Investor Rebate is equal to 25% of an investor's qualified research costs, up to a maximum rebate of $1 million per investor per fiscal year and a maximum total rebate of $5 million for all investors per fiscal year. To obtain this rebate, investors must submit an application to the board of Institutions of Higher Learning (IHL) in Mississippi.

The Research and Development Skills Tax Credit is equal to an annual credit of $1,000 for each new full-time employee in any new job requiring research and development skills (such as a chemist or engineer). This hiring credit is applicable for the first five years of employment. The credit is available to most companies regardless of industry in which it engages; however, no business enterprise for the transportation, handling, storage, processing, or disposal of hazardous waste is eligible to receive this credit.

To apply for this credit:

  1. Before any credit is taken on a return, the taxpayer must send a letter to the Mississippi Department of Revenue to request the credit, including sufficient information to determine whether a list of employees qualify for the credit (e.g. a copy of a bachelors degree from an accredited university/college). The credit should not be taken until a letter of authorization is issued.
  2. You must attach a copy of the letter giving authority for the credit and a schedule of computation to the return.

Learn more about Mississippi's R&D Tax Credit law here and here.

R&D Tax Credit Available:

Yes

Eligible Entities:

C-Corporations, S-Corporations, LLCs, Partnerships

Deadline for Tax Filing:

Applications

Data Required to Compute Credit:

A business interested in qualifying for the Research and Development Skills Credit should request approval in writing and provide the following information for each employee and position.

  1. Title of the job;
  2. Purpose of the job;
  3. Education requirements for the job;
  4. Experience requirements for the job;
  5. Hours worked per week;
  6. Salary or compensation; and
  7. Hire date

Credit Carryforward:

5 years

Specific Items to Note:

In order to receive the Academic Research Investor Rebate, the investor must submit the SMART Business Incentive Form, as well as proof of payment to the college or research corporation, a copy of the SMART Business certificate, a copy of the research agreement, and any other documentation requested by the Department of Revenue.

  • Rebates may not be issued more than once a year to any one investor.
  • Any research performed prior to certification by IHL will not be considered qualified research costs.
  • Any research performed outside the state of Mississippi will not be considered qualified research.
  • Any research funded by any grant, contract, or otherwise by another person or governmental entity will not be considered qualified research.

The Research & Development Skills Credit utilization is limited to 50% of the Mississippi Income Tax liability per year.

  • The unused portions can be carried forward for up to 5 years from the original year in which the excess credit could not be used. Taxpayers may use the oldest year's unexpired credits first (first in, first out).

How much could I save?

To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.

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Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.

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