North Carolina R&D Tax Credit Benefits for Businesses

North Carolina and the R&D Tax Credit

State Credit Name: North Carolina Research and Development Tax Credit

Expiration Date: Indefinite

Who Can Apply? Corporations and flow-through entities

Credit Carry Forward: Unused credit can be carried forward 15 years.

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Special Notes: The taxpayer is eligible for the North Carolina R&D tax credit if they meet certain criteria, including:
- - meeting the wage standard,
  - providing health insurance for employees,
  - maintaining a good environmental record, and
  - having a good Occupational Safety and Health Act record.
There are five different tiers of credit rates depending on business type:
- - Small business: 3.25%
  - Low-tier research: 3.25%
  - University research: 20%
  - Eco-industrial park: 30%
  - Other expenses: 1.25% – 3.25% dependent on level of expenses.
Only one credit rate is allowed for the same expenses. If more than one category applies to the same expenses, the higher credit is used.

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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 6255 Towncenter Drive, Clemmons, North Carolina provides R&D tax credit consulting and advisory services to Charlotte, Raleigh, Greensboro, Durham, Winston-Salem, Fayetteville, Cary, Wilmington, High Point, Greenville, Asheville, Concord, Gastonia, Jacksonville, Chapel Hill, Rocky Mount, Huntersville, Burlington, Wilson and Kannapolis.

If you have any questions or need further assistance, please call or email our local North Carolina Partner on (984) 480-4601.
Feel free to book a quick teleconference with one of our North Carolina 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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North Carolina R&D Tax Credit Filing Instructions

To claim the Research and Development (R&D) tax credit in North Carolina, eligible businesses must file Form NC-478I, Research and Development with the North Carolina Department of Revenue (NCDOR). This credit, available under Article 3F of the state’s tax laws, provides an incentive for qualified North Carolina research and development expenses. Eligibility criteria often include meeting specific wage standards, providing health insurance for employees, and maintaining good environmental and Occupational Safety and Health Act (OSHA) records. The credit encompasses two main parts: a credit for North Carolina university research expenses and a credit for qualified North Carolina research expenses, which is further categorized into small business, low-tier research, and other research expenses. Businesses should review the detailed instructions for Form NC-478I and relevant state statutes to ensure they meet all current requirements and properly calculate the credit amount.