Ohio R&D Tax Credits

Ohio offers the Research and Development Investment Tax Credit, a nonrefundable credit used to offset the Commercial Activity Tax (CAT). In order to qualify, the taxpaying corporation must invest in QREs, as defined in Section 41 of the Internal Revenue Code. Both in-house expenses, such as wages and supplies, and 3rd-party contract expenses qualify.

The credit equals 7% of the amount of QREs in excess of the taxpayer's average investment in Qualifying Research Expenses over the three preceding taxable years. Any excess credit not used for the taxable year in which it is earned may be carried forward for up to seven years. There is no special application or approval process for this tax credit.

Learn more about Ohio's R&D Tax Credit law from the Ohio Laws and Administrative Rules.

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R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporations, S-Corporations, LLCs, Partnerships

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Deadline for Tax Filing:

Due with Ohio Tax Return

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Data Required to Compute Credit:

Claim Period Qualified R&D Expenses (QREs)

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What Information is needed?

QREs for Prior 3 Years

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Credit Carryforward:

7 years

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The R&D tax credit equals:

• The Ohio R&D tax credit equals 7% of Ohio qualified R&D expenses over the average of qualified expenses for the three prior taxable years.

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Specific Item to Note:

• There is no special application or approval process for this tax credit. The credit may be claimed on a tax return.