Minnesota R&D Tax Credit and Its Benefits to Companies

Minnesota and the Research and Development (R&D) Tax Credit

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.

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Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed’s office location at 14870 Granada Avenue, Apple Valley, Minnesota provides R&D tax credit consulting and advisory services to Minneapolis, Saint Paul, Rochester, Duluth, Bloomington, Brooklyn Park, Plymouth, Maple Grove, Woodbury and St. Cloud.

If you have any questions or need further assistance, please call or email our local Minnesota Partner on (952) 236-4344.
Feel free to book a quick teleconference with one of our Minnesota R&D tax credit specialists at a time that is convenient for you. Click here for more information about R&D tax credit management and implementation.

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