Mississippi R&D Tax Credits

Mississippi does not offer a general R&D tax credit but provides a Research and Development Skills Tax Credit of $1,000 per year per new full-time employee requiring R&D skills for five years. Businesses can also claim the federal R&D tax credit. Contact Strike Tax to maximize your savings.

Qualifying activities must be technological, aimed at developing or improving a business component, eliminate uncertainty, and involve experimentation. Examples include product innovation or process improvements in industries like manufacturing. Strike Tax can identify qualifying projects.

Yes, startups can claim the federal R&D credit, including a payroll tax offset of up to $500,000 per year for up to five years if gross receipts are under $5 million; state credit for new R&D-skilled hires. Strike Tax can guide eligibility.

Maintain contemporaneous records such as project descriptions, time tracking, wage allocations, supply costs, and contract research agreements. For 2025, Section G of Form 6765 (business component information) is optional for all filers and becomes mandatory in 2026 (with exceptions for small businesses). Strike Tax ensures audit-ready documentation.

Attach Form 6765 to your federal tax return. The federal R&D credit does not impact Mississippi state tax liability, as the state does not conform to federal credits for state tax computation; claim the state Skills Credit separately on your Mississippi return, limited to 50% of liability. Strike Tax streamlines the process.

No major changes to the federal R&D credit for 2025, but Mississippi's Skills Tax Credit remains stable at $1,000 per employee for up to five years. Businesses should monitor for potential expansions in jobs incentives. Strike Tax stays updated on legislative shifts.

The federal R&D credit offers up to 20% on qualified research expenses exceeding a base amount, or 14% under the Alternative Simplified Credit method. Mississippi businesses can claim this alongside the unrelated state Skills Credit for enhanced overall savings.

Calculate by determining total qualified research expenses (QREs), subtracting the base amount (fixed percentage of prior gross receipts), and applying the credit rate to the excess. Use IRS Form 6765 for step-by-step guidance. Strike Tax's calculator provides quick estimates.

Federal R&D credits can be carried forward up to 20 years or back 1 year. In Mississippi, any unused Research and Development Skills Tax Credit can be carried forward for up to five years and used against up to 50% of income tax liability.

Retain four years of documentation including payroll records, project timelines, expense receipts, and uncertainty/experimentation logs. Mississippi DOR may reference federal audit outcomes but does not automatically accept them or guarantee state adjustments. Strike Tax helps prepare compliant files.