Utah R&D Tax Credits

Utah provides a Research and Development Credit which closely follows IRC § 41. The credit amount is a combination of the following calculations:

1. 5% of your excess qualified research expenses (QREs) for research activities conducted in Utah over a comparative base amount;
2. 5% of certain excess payments made to a qualified organization for basic research conducted in Utah over a comparative base amount; and
3. 7.5% of your QREs in Utah for the current tax year.

‍Note: You may carry forward any credit for #1 or #2 (above) that exceeds your tax liability for 14 years. You may not carry forward any credit as calculated for #3.

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Learn more about Utah's R&D Tax Credit law from the state tax code here and Utah Income Taxes.

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R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporation, S-Corporations, LLCs, Partnerships

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Deadline for Tax Filing:

Due with Utah Tax Return

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Data Required to Compute Credit:

Claim Period Utah Qualified R&D Expenses (QREs)

Utah Gross Receipts for Prior 4 Years

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What Information is needed?

Utah QREs for Prior 3 Years

Utah Gross Receipts for Prior 4 Years

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Credit Carryforward?

14 Years for comparative credit amounts (No carryback)

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The Utah R&D tax credit equals the sum of the following:

• 5% of your excess qualified research expenses (QREs) for research activities conducted in Utah over a comparative base amount;
• 5% of certain excess payments made to a qualified organization for basic research conducted in Utah over a comparative base amount; and
• 7.5% of your QREs in Utah for the current tax year.

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Specific Items to Note:

• Regarding utilization, credits calculated as 7.5% of a taxpayer's current-year QREs may not be carried forward.
• For the state of Utah, this is a non-refundable credit.
• Utah's R&D Tax Credit is a permanent state credit and will not expire.
• There is no official Utah form for this credit. The final credit amount gets reported on Form TC-40A (Part 4 - using code 12). Keep all related documents with your records.