Idaho R&D Tax Credit Filing Instructions

To claim the Research and Development (R&D) tax credit in Idaho, businesses must engage in qualifying research activities conducted within the state. The Idaho R&D tax credit is largely based on federal Section 41 rules, but importantly, it only applies to research expenses incurred in Idaho. The credit is calculated as 5% of the excess of qualified research expenditures (QREs) over a predetermined base amount, which is derived using the taxpayer’s average annual gross receipts from the previous four years attributable to Idaho. This credit is non-refundable and can be carried forward for up to 14 years to offset future Idaho income tax liabilities. To make the claim, businesses must complete and submit Form 67, Credit for Idaho Research Activities, along with their annual Idaho income tax return. Additionally, accurate records and documentation detailing eligible expenses and research activities must be maintained for verification.