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The state of Rhode Island offers a Research and Development Expense Credit which has similar qualification requirements to IRC § 41.
Prior to 1998, Rhode Island was a piggyback state, meaning the Federal Form 6765 had to be calculated to determine the Rhode Island state credit calculation. For today's R&D studies, the credit calculation is based purely on current year R&D expenditures. The credit equals 22.5% of the expenses up to $111,111 (or $25,000) plus 16.9% of the remaining expenses over the $111,111 threshold.
Under Rhode Island statute 44-11-2(e), the credit cannot reduce the tax below the minimum fixed tax rate. Any additional credit can be carried forward seven years. Unlike the federal credit, in Rhode Island, in the instance of consolidated entities, the credit can only go against tax of the specific corporation and cannot be allocated out.
The credit is claimed using forms RI-7695E - Research & Development Expense Credit, and entered on Schedule B-CR, Business Entity Credit Schedule.
Lastly, credit utilization is limited to 50% of the tax due after all other credits available to the taxpayer have been used.
Learn more about Rhode Island R&D Tax Credit law here.
R&D Tax Credit Available:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Due with Rhode Island Tax Return
Data Required to Compute Credit:
Claim period Federal Qualified R&D Expenses (QREs)
What Information is needed?
Federal Form 6765
Claim period Rhode Island QREs
For tax years after 1998, the credit equals:
Attach Schedule B-CR and Form RI-7695E to your return.
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.
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Minimizing your tax liability only increases your organization’s value and performance, while providing greater opportunity for every dollar.