R&D in New Hampshire

R&D Tax Credits

New Hampshire

The R&D tax credit can help a wide variety of businesses offset and reduce their income tax liability, in addition to providing many other benefits.

The Business Profits Tax is the first tax that receives the credit under the New Hampshire R&D Tax Credit, and the Business Enterprise Tax receives any remaining funds. A percentage of 10% eligible manufacturing R&D expenses or a specific monetary amount of $50,000 whichever is less, is the credit amount. To ensure the viability of the programme, all credits for a fiscal year will be proportionately lowered if the total amount of credit requests surpasses a certain threshold. The state promotes firms to invest in R&D initiatives that foster innovation and growth by lowering their tax obligations. This tax credit programme is a great method to encourage economic growth and a business-friendly environment in New Hampshire.

The New Hampshire R&D tax credit is initially applied to the Business Professional Tax, but any unused portion can be carried over to the Business Enterprise Tax. Although not an incremental credit, taxpayers need to include a copy of their R&D award letter with their business tax return and claim the credit on the DP-160 and/or Business Enterprise Tax return.

It’s important to keep in mind that the expenses must be directly linked to qualifying research and development activities and must have been incurred within Connecticut. There may also be exclusions and limitations on certain qualifying expenses that businesses should be aware of.

Commercial entities including C-Corporations, S-Corporations, LLCs, Partnerships, and pass-throughs that incur expenses throughout the fiscal year and are subject to Business Profits Tax are eligible for the New Hampshire R&D Tax Credit.

Wages paid to business organisation workers for services provided in New Hampshire that qualify and are reported as a credit by the business organisation under section 41 of the Internal Tax Code are referred to as “qualified manufacturing research and development” expenditures.

R&D Tax Credits in
New Hampshire

For qualified manufacturing R&D expenditures made or incurred within the state during the fiscal year, New Hampshire provides a Research and Development Tax Credit. To lessen the tax burden of qualified taxpayers, the credit is given for wages that satisfy federal credit conditions. The state’s dedication to building an environment that is encouraging of businesses and entrepreneurs pursuing innovation and growth is demonstrated through this programme. The R&D Tax Credit will help the state grow its economy by luring new companies to the region and encouraging current ones to grow.

What Goes into the New Hampshire R&D Tax Credit as a Qualified Research Expense?

The New Hampshire research and development tax credit allows for businesses to claim a percentage of their qualifying research expenses. 

In order for an expense to qualify it must meet specific research criteria:

  1. Products, services, processes, or software must be new or improved in some way 
  2. Uncertainty must be eliminated as a result of the research 
  3. The research must be technological 
  4. Research must include experimentation processes of some nature

The types of expenses that are applicable to claim under the credit include the following:

Wages paid to employees who are directly involved in the performance of research and development activities within the state of New Hampshire. This includes payments made to subcontractors involved in the performance of such activities.

Take Advantage of the
R&D Tax Credit with Source Advisors

Most states offer R&D tax credits as well with many of them being more lucrative than the federal credit. At Source Advisors, we can help assess your company’s federal R&D tax credit opportunity and also determine any state R&D tax credit availability. Our team of experienced CPAs, attorneys, engineers, and technology experts helps companies save money and create cash flow with R&D tax credits that can then help drive overall growth.