The Minnesota R&D credit is generated from qualified research activities (QRAs) performed within the state. Qualifying activities are defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.”
State Credit Name: Credit for Increasing Research Activities
Expiration Date: Indefinite
Who Can Apply? Corporations and flow-through entities
Credit Carry Forward: Credit can be carried forward for 15 years.
About the Credit: The Minnesota state research credit adopts the federal definition of QRE’s. The credit is 10% of the QRE’s up to $2 million, and 2.5% for expenses above $2 million. QRE’s must have taken place in Minnesota.
Notes: For partnerships and S-corporations, the credit was refundable from 2010 – 2012. C-Corporations can continue to carry forward credits acquired before 2010 and after 2012. For tax years after 2012, C-Corporations can apply the credit to any member of a corporation business that is included in the combined return.
Click here to find out if you qualify for the federal research credit.