New Hampshire’s Research and Development Tax Credit is available to businesses with “qualifying research and manufacturing expenditures.” The credit is based upon the wages paid to individuals engaged in “discovering information which constitutes qualified research and development of a new or improved manufacturing process or business component of the business organization.” The amount of the credit is the lesser of $50,000 or 10% of wages paid to individuals providing these services, subject to a reduction if total contributions exceeds the annual state-wide cap of $7,000,000. Once the cap is reached, a qualifying business will be awarded a proportional share of the $7,000,000 as a credit.
The credit may be used to reduce dollar-for-dollar the business profits tax liability in the current taxable year. If there is any excess, the credit may be used to offset the current year’s business enterprise tax. Additionally, any excess credit may be carried forward for up to five years against the business profits tax or business enterprise tax liabilities in subsequent years.
In order to qualify for the credit, a business must apply with the N.H. Department of Revenue Administration by June 30 following the taxable period in which the qualifying research and manufacturing expenditures were made. Applicants will be notified, by mail, of award amounts granted to them by September 30. For more information on New Hampshire’s Research and Development Tax Credit or other state and local tax (SALT) questions please contact Attorney John Hayes at john@paula89.sg-host.com.