The BPT is New Hampshire's primary corporate income tax, currently set at 7.5%. The R&D Credit allows qualified manufacturing enterprises to offset this tax with wage-based credits, fostering local innovation.
Understanding the Business Profits Tax
This section provides a foundational understanding of the BPT, including current rates, thresholds, and its historical context within New Hampshire tax law. It establishes the baseline liability before applying any credits.
The Business Profits Tax (BPT) is assessed on income from conducting business activity within New Hampshire. Unlike a sales tax, it targets the "bottom line" of a business entity. It applies to corporations, partnerships, LLCs, and proprietorships.
- ➤ Current Rate: 7.5% (for periods ending on/after 12/31/23).
- ➤ Threshold: Filing required if gross business income exceeds $103,000.
Historical reduction of the tax rate to encourage business growth.
New Hampshire utilizes a "water's edge" unitary combined reporting method. This means a business must calculate its tax based on the combined income of all related entities conducting a unitary business, but generally excludes foreign affiliates (water's edge). Income is apportioned to NH based on sales.
The R&D Tax Credit Mechanism
Established under RSA 77-A:5, XIII, this credit is a manufacturing-focused incentive. This section details the qualification criteria and the specific calculation logic mandated by law.
Select the conditions that apply to your business:
- Basis: The credit is based on "Qualified Manufacturing Research and Development Expenditures," specifically wages paid to employees.
- Calculation: Generally 10% of the qualified expenditures.
- The Cap: There is a $7,000,000 annual aggregate cap for all taxpayers in NH.
- Proration: If total requests exceed $7M, the award is prorated.
- Carryforward: Unused credits can be carried forward for up to 5 years.
Tax Year End
Accumulate qualified wage data.
June 30th
DEADLINE: File Form DP-165 with NH DRA.
September
DRA notifies businesses of the pro-rated award amount.
Interactive Impact Analysis
Use this simulation to understand how the R&D credit reduces your BPT liability. Note that this is an estimation; actual results depend on the statewide pool utilization.
Historically, the $7M cap is exceeded, reducing awards.
Gross BPT Liability
$0
Est. R&D Credit
$0
Net Tax Due
$0
Scenario Visualization
Revenue Office Guidance & Law
Official guidance derived from the New Hampshire Department of Revenue Administration (DRA) Technical Information Releases (TIRs) and statutes.
- Form DP-165: The Research and Development Tax Credit Application. Must be postmarked by June 30 following the tax year.
- Business Tax Return: The credit is eventually claimed on the main Business Tax return using DP-160 on the specific line for "credits," but only after receiving the award letter from the DRA.
The intersection of BPT and the R&D Credit represents a significant opportunity for NH manufacturers. While the BPT imposes a flat 7.5% liability, the R&D credit offers a dollar-for-dollar reduction. However, due to the $7 million statewide cap, businesses must treat the credit as a variable bonus rather than a guaranteed 10% return. Timely filing of Form DP-165 (by June 30) is the single most critical compliance step.
BPT Statutory Rates
| Taxable Period Ending | BPT Statutory Rate |
|---|---|
| On or after December 31, 2023 | 7.5% |
| On or after December 31, 2022 | 7.6% |
| On or after December 31, 2021 | 7.7% |
| On or after December 31, 2019 | 7.7% |
| On or after December 31, 2018 | 7.9% |
| On or after December 31, 2016 | 8.2% |
Gross Business Income Filing Threshold
| Taxable Period Beginning | Gross Business Income Filing Threshold |
|---|---|
| On or after January 1, 2025 | $109,000 |
| January 1, 2023 – December 31, 2024 | $103,000 |
| On or after December 31, 2022 | $92,000 |
| Historical (prior to 2022) | $50,000 |
Federal vs. New Hampshire Calculation Components
| Feature | Federal Regular Credit (IRC 41) | NH R&D Credit (RSA 77-A:5) |
|---|---|---|
| Credit Rate | 20% | 10% |
| Eligible Costs | Wages, Supplies, Contract Research | NH-Based Wages Only |
| Minimum Base | 50% of current QREs | $0 |
| State Cap | None (Tax liability limited) | $50,000 (Individual) |
| Proration | None | Yes (if >$7M statewide) |
| Carryforward | 20 Years | 5 Years |
FY 2024 Used Credits
| Tax Credit Program | FY 2024 Used Credits | Program Type |
|---|---|---|
| BET Paid Credit (against BPT) | $160,296,000 | Cascading |
| Insurance Premium Tax Credits | $30,894,000 | Non-Cascading |
| Research & Development Credit | $610,000 | Non-Cascading |
| Economic Revitalization Zone | $2,532,000 | Non-Cascading |
| Education Tax Credit | $134,000 | Non-Cascading |
This page is provided for information purposes only and may contain errors. Please contact your local Swanson Reed representative to determine if the topics discussed in this page applies to your specific circumstances.
Who We Are:
Swanson Reed is one of the largest Specialist R&D Tax Credit advisory firm in the United States. With offices nationwide, we are one of the only firms globally to exclusively provide R&D Tax Credit consulting services to our clients. We have been exclusively providing R&D Tax Credit claim preparation and audit compliance solutions for over 30 years. Swanson Reed hosts daily free webinars and provides free IRS CE and CPE credits for CPAs.
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What is the R&D Tax Credit?
The Research & Experimentation Tax Credit (or R&D Tax Credit), is a general business tax credit under Internal Revenue Code section 41 for companies that incur research and development (R&D) costs in the United States. The credits are a tax incentive for performing qualified research in the United States, resulting in a credit to a tax return. For the first three years of R&D claims, 6% of the total qualified research expenses (QRE) form the gross credit. In the 4th year of claims and beyond, a base amount is calculated, and an adjusted expense line is multiplied times 14%. Click here to learn more.
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R&D Tax Credit Preparation Services
Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed provides state and federal R&D tax credit preparation and audit services to all 50 states.
If you have any questions or need further assistance, please call or email our CEO, Damian Smyth on (800) 986-4725.
Feel free to book a quick teleconference with one of our national R&D tax credit specialists at a time that is convenient for you.
R&D Tax Credit Audit Advisory Services
creditARMOR is a sophisticated R&D tax credit insurance and AI-driven risk management platform. It mitigates audit exposure by covering defense expenses, including CPA, tax attorney, and specialist consultant fees—delivering robust, compliant support for R&D credit claims. Click here for more information about R&D tax credit management and implementation.
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Swanson Reed offers R&D tax credit preparation and audit services at our hourly rates of between $195 – $395 per hour. We are also able offer fixed fees and success fees in special circumstances. Learn more athttps://www.swansonreed.com/services/our-fees/
New Hampshire inventionINDEX March 2 
