Technology Jobs and Research and Development Tax Credit. This credit is 5% of qualified expenditures for conducting research and development. An additional 5% credit is available if the taxpayer increases its annual payroll by at least $75,000 for every $1 million in qualified expenditures it claims in a tax year. The basic and additional credits double for businesses in rural areas. To be eligible, qualified expenditures must be made on or after January 1, 2016.
The taxpayer must make the eligible expenditures for research and development at a qualified facility. For more information on qualified expenditures, see the instructions for Form RPD41385, Application for Technology Jobs and Research and Development Tax Credit.
The holder of the Technology Jobs and Research and Development Tax Credit document may apply all or part of “basic” credits against the holder’s combined state compensating, withholding, and gross receipts tax, less any local option gross receipts tax. “Basic” credit may be not be refunded but may be carried forward for three years from the date of the original claim.
If you have earned “additional” credits, you may claim that amount against personal or corporate income taxes. If the taxpayer is a qualified research and development small business, a portion of the “additional” credit can be refunded, based on the taxpayer’s total qualified expenditures made in a tax year. Any credit not claimed against the taxpayer’s income tax or corporate income tax due, or refunded, may be carried forward for three years from date of the original claim.
NOTE: Taxpayers who claim the research and development small business tax credit are ineligible to claim the investment tax credit or the technology jobs and research and development tax credit for the same reporting period.