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The North Dakota Research Expense Tax Credit incentivizes businesses to invest in qualified research activities within the state, offsetting income tax liabilities through the Office of State Tax Commissioner. Enacted under N.D.C.C. § 57-38-30.5, the credit uses definitions drawn from IRC § 41 but applies only to North Dakota-sourced research and expenses.
Eligibility requires conducting qualified research activities in North Dakota that meet federal IRC § 41 standards, with expenses tied to technological uncertainty and innovation. Businesses in primary sectors may access enhanced transfer options upon certification.
North Dakota offers two methods: the regular incremental method and the alternative simplified credit (ASC). Both use only North Dakota-sourced QREs and follow federal base amount definitions under IRC § 41.
North Dakota's Research Expense Tax Credit includes provisions tailored to support emerging primary sector businesses, with flexibility for carryovers and transfers.
Real results from a North Dakota ag-tech startup
The North Dakota Research Expense Tax Credit offers 25% on the first $100,000 of excess qualified research expenses and 8% on amounts above under the regular method, or 17.5% and 5.6% via the alternative simplified method. Administered by the Office of State Tax Commissioner, it supports in-state innovation aligned with federal IRC § 41.
Eligible activities involve technological uncertainty in developing or improving products, processes, or software conducted in North Dakota, such as agricultural process enhancements or energy tech prototypes. Strike Tax identifies qualifying projects to ensure compliance.
For $200,000 in excess QREs, you could save $33,000 under the regular method, plus federal credits. Qualified small businesses may transfer $100,000 for immediate value. Use Strike Tax’s R&D Credit Calculator for personalized estimates.
Credits are nonrefundable but can be carried back 3 years or forward 15 years. Small primary sector businesses (<$750,000 revenue) may transfer up to $100,000 of unused credits upon certification, providing cash-like benefits. Strike Tax assists with certification and maximization.
File with your North Dakota income tax return, attaching a computation schedule. For transfers, obtain Department of Commerce certification and submit Form CTS. Strike Tax handles documentation and filing to simplify the process.
Yes, stack state and federal credits on the same North Dakota QREs for compounded savings. The state credit uses federal definitions, so coordinated claims are efficient. Strike Tax optimizes both for maximum impact
Transfers are limited to $100,000 for certified qualified research and development companies: primary sector, first-time research after 2006, and revenues under $750,000. Individuals, C-corps, estates, or trusts qualify; passthroughs do not. File Form CTS jointly with the transferee.
Elect ASC for a simpler base (50% of prior 3-year average QREs), yielding 17.5% on the first $100,000 excess and 5.6% above. If any prior year had zero QREs, reduced rates of 7.5% and 2.4% apply. It's ideal for startups with limited history and can be chosen annually. Strike Tax evaluates the best method for your situation.
With tiered rates up to 25%, 15-year carryforward, and transfer options, it provides high ROI for ag, energy, and manufacturing firms. No annual cap (except pre-2007) ensures scalability. Strike Tax tailors claims for sector-specific needs.
Strike Tax ensures full compliance with state and federal rules, maximizes tiered credits and transfers, and provides audit-ready documentation. Our experts guide certification and stacking for optimal savings.
Use our calculator to estimate your potential federal and state benefits
Connect with us to find out how R&D tax credits can boost your organization’s bottom line.
North Dakota provides a Research and Experimental Expenditure Tax Credit. An individual, estate, trust, partnership, corporation, or limited liability company (LLC) is allowed an income tax credit for conducting research in North Dakota. The credit is equal to a percentage of the excess of qualified research expenses in North Dakota over the base amount in North Dakota.
For taxpayers who began qualified research in North Dakota before January 1, 2007, the maximum credit allowed in any year is $2 million, and any credit over this amount is not allowed in any year.
Learn more about North Dakota's R&D Tax Credit law from the North Dakota Tax Commission.
R&D Tax Credit Available:
Yes
Eligible Entities:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Due with North Dakota Tax Return
Data Required to Compute Credit:
Claim Period North Dakota Qualified R&D Expenses (QREs)
Credit Carryforward:
The unused portion of the credit must be carried back 3 tax years and carried forward up to 15 tax years
"Qualified research expenses" and "base amount" have the same meaning as defined under federal income tax law (I.R.C. § 41).
If a taxpayer is a qualified R&D company (other than partnerships or S corporations), the company may sell, transfer, or assign up to $100,000 of its unused tax credit to another taxpayer. The North Dakota Department of Commerce, has the following requirements to be eligible for this 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.
The North Dakota Research Expense Tax Credit offers 25% on the first $100,000 of excess qualified research expenses and 8% on amounts above under the regular method, or 17.5% and 5.6% via the alternative simplified method. Administered by the Office of State Tax Commissioner, it supports in-state innovation aligned with federal IRC § 41.
Eligible activities involve technological uncertainty in developing or improving products, processes, or software conducted in North Dakota, such as agricultural process enhancements or energy tech prototypes. Strike Tax identifies qualifying projects to ensure compliance.
For $200,000 in excess QREs, you could save $33,000 under the regular method, plus federal credits. Qualified small businesses may transfer $100,000 for immediate value. Use Strike Tax’s R&D Credit Calculator for personalized estimates.
Credits are nonrefundable but can be carried back 3 years or forward 15 years. Small primary sector businesses (<$750,000 revenue) may transfer up to $100,000 of unused credits upon certification, providing cash-like benefits. Strike Tax assists with certification and maximization.
File with your North Dakota income tax return, attaching a computation schedule. For transfers, obtain Department of Commerce certification and submit Form CTS. Strike Tax handles documentation and filing to simplify the process.
Yes, stack state and federal credits on the same North Dakota QREs for compounded savings. The state credit uses federal definitions, so coordinated claims are efficient. Strike Tax optimizes both for maximum impact
Transfers are limited to $100,000 for certified qualified research and development companies: primary sector, first-time research after 2006, and revenues under $750,000. Individuals, C-corps, estates, or trusts qualify; passthroughs do not. File Form CTS jointly with the transferee.
Elect ASC for a simpler base (50% of prior 3-year average QREs), yielding 17.5% on the first $100,000 excess and 5.6% above. If any prior year had zero QREs, reduced rates of 7.5% and 2.4% apply. It's ideal for startups with limited history and can be chosen annually. Strike Tax evaluates the best method for your situation.
With tiered rates up to 25%, 15-year carryforward, and transfer options, it provides high ROI for ag, energy, and manufacturing firms. No annual cap (except pre-2007) ensures scalability. Strike Tax tailors claims for sector-specific needs.
Strike Tax ensures full compliance with state and federal rules, maximizes tiered credits and transfers, and provides audit-ready documentation. Our experts guide certification and stacking for optimal savings.
