New Hampshire Research & Development Tax Credit Glossary

What is the New Hampshire R&D Tax Credit?

Answer: The New Hampshire Research and Development Tax Credit is a statutory program offering businesses up to a 10% credit on excess qualified manufacturing R&D expenditures incurred within the state, capped at $50,000 per taxpayer annually to offset BPT or BET liabilities.

Glossary Term	Definition
Research and Development Tax Credit Program	A state incentive encouraging businesses to invest in qualified research activities within New Hampshire.
RSA 77-A:5, XIII	The specific New Hampshire statute detailing the Research and Development Tax Credit against the BPT.
RSA 77-E:3-b	The New Hampshire statute applying the R&D tax credit against the Business Enterprise Tax.
Rev 2406.05	The administrative rule outlining the application and allocation processes for the NH R&D credit.
Qualified Manufacturing Research and Development Expenditures	Costs incurred for R&D activities specifically tied to manufacturing processes within the state.
Wages for Services Rendered in New Hampshire	Compensation paid to employees directly engaging in qualified research services physically within the state.
Base Amount	A historical expenditure threshold a business must legally exceed to claim the R&D credit.
Maximum Aggregate Credit Limit ($7,000,000)	The total statewide legislative cap on all R&D credits awarded annually in New Hampshire.
Maximum Taxpayer Credit Limit ($50,000)	The highest R&D credit amount a single business taxpayer can receive in one fiscal year.
Credit Percentage (10%)	The statutory rate applied to excess qualified R&D expenses to calculate the tax credit.
Excess Qualified R&D Expenses	The portion of current-year qualified research expenses that exceeds the calculated historical base amount.
Business Profits Tax (BPT)	A New Hampshire tax levied on income derived from conducting business activity within the state.
Business Enterprise Tax (BET)	A statewide tax assessed on the enterprise value tax base of a New Hampshire business.
DP-165	The specific New Hampshire Department of Revenue form utilized to apply for the R&D credit.
R&D Tax Credit Application	The formal submission required by June 30th to request a share of the state credit.
Federal Form 6765	The IRS form utilized by taxpayers to claim the federal Credit for Increasing Research Activities.
Internal Revenue Code (IRC) Section 41	The federal tax code section defining qualified research activities and calculating the R&D credit.
Application Deadline (June 30)	The strict annual cutoff date to submit form DP-165 to the NH Department of Revenue.
Taxable Period	The specific financial timeframe, typically a year, for which a business calculates its tax liability.
Fiscal Year	A standard 12-month accounting period used by businesses for financial reporting and tax assessment purposes.
Granite Tax Connect (GTC)	New Hampshire’s online portal for taxpayers to manage accounts, file returns, and apply for credits.
Commissioner of the Department of Revenue Administration	The principal executive responsible for overseeing and administering New Hampshire’s tax laws and credit programs.
R&D Award Letter	Official departmental notification detailing the approved R&D tax credit amount granted to a specific taxpayer.
Credit Carryover	The financial ability to apply unused R&D tax credits to offset future state tax liabilities.
Maximum Credit Carryover Period (5 tax years)	The five-year statutory timeframe during which unused New Hampshire R&D credits can be legally utilized.
DP-160	The required state form used to report credits applied against BPT and BET corporate liabilities.
Business Tax Return	The comprehensive annual filing that officially reports a company’s BPT and BET financial obligations.
Pro-Rata Allocation	The proportional distribution of the $7 million cap if total approved credits exceed the limit.
Qualified Services	Specific activities performed by employees that directly support or constitute qualified research and technological development.
Qualified Research	Technological development activities successfully meeting the strict federal four-part test under IRC Section 41.
IRC Section 41 Four-Part Test	Federal criteria requiring research to be technological, eliminate uncertainty, involve experimentation, and directly improve functionality.
Discovering Information	The active process of gaining new technical knowledge intended to develop an improved business component.
New or Improved Manufacturing Process	Enhancements to production methods that significantly increase efficiency, reduce waste, or improve final product quality.
New or Improved Business Component	A product, process, software, technique, formula, or invention fundamentally developed or enhanced by the taxpayer.
Services Undertaken for Research	Direct support, direct supervision, or actual physical conduct of experimental activities qualifying for the credit.
Wages Reported in the Enterprise Value Tax Base	Employee financial compensation that is legally subject to the New Hampshire Business Enterprise Tax assessment.
Economic Revitalization Zone Tax Credit (ERZTC)	A separate statutory incentive for businesses actively creating jobs in designated New Hampshire economic zones.
Ineligibility for ERZTC Wages	Rule dictating that wages used to claim the ERZTC cannot be double-counted for R&D credits.
Business Organization	Any commercial enterprise, whether a corporation or partnership, conducting taxable economic activity within New Hampshire.
Corporation	A legally distinct corporate business entity subject to New Hampshire’s statutory BPT and BET taxes.
Partnership	A business structure where multiple owners share company profits, losses, and potential R&D tax benefits.
Limited Liability Company (LLC)	A flexible business structure providing limited liability protection, frequently utilized among NH R&D credit claimants.
S-Corporation	A corporate entity structure that passes corporate income, losses, and tax credits directly to shareholders.
Unitary Business	A unified group of affiliated corporate entities legally treated as a single enterprise for taxation.
Single Taxpayer Treatment	The legal requirement that unitary businesses combine their total expenses and apply collectively for credits.
Pro Forma Federal Form 6765	A draft IRS form 6765 prepared specifically to substantiate the New Hampshire R&D application filing.
Notification of Award Amount (September 30)	The firm deadline for the state to inform taxpayers of their approved R&D credit allocation.
Business Profits Tax Return	The primary annual filing detailing a company’s net income subject to the New Hampshire BPT.
Business Enterprise Tax Return	The required state filing to properly report and calculate a company’s New Hampshire BET liability.
Overpayments after Applying Credits	Excess tax payments legally remaining after all R&D and other credits have been applied fully.