North Dakota R&D Tax Credit Explained for Businesses

North Dakota and the R&D Tax Credit

State Credit Name: Income Tax Credit for Research and Experimental Expenditures

Expiration Date: Permanent

Who Can Apply? Corporations and flow-through entities

Credit Carry Forward: Unused credit can be carried forward 15 years and carried back 3 years.

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Special Notes: The applicable percentage is 25% for the first $100,000 of excess expenses in a tax year. For excess expenses over $100,000 in a year, the applicable percentage is 8%.

Under certain conditions, a taxpayer may sell, transfer, or assign up to $100,000 of its unused tax credit to another taxpayer if the taxpayer selling the credit is certified by the Department of Commerce Division of Economic Development and Finance to be a primary sector business with annual gross revenues of less than $750,000 that conducts qualified research in North Dakota for the first time after December 31, 2006.

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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 1531 32nd Ave S, Fargo, North Dakota provides R&D tax credit consulting and advisory services to Fargo, Bismarck, Grand Forks, Minot and West Fargo.

If you have any questions or need further assistance, please call or email our local North Dakota Partner on (701) 979-7220.
Feel free to book a quick teleconference with one of our North Dakota 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 Dakota R&D Tax Credit Filing Instructions

To claim the Research and Experimental Expenditure Tax Credit in North Dakota, eligible businesses must generally include an attached schedule or worksheet detailing the calculation of the credit with their North Dakota income tax return. The credit is determined as a percentage of the qualified research expenses (QREs) in North Dakota that exceed a defined base amount, with QREs and the base amount sharing the same meaning as under federal income tax law (I.R.C. § 41). While there isn’t a universally named dedicated state form for the R&D tax credit claim itself akin to federal Form 6765, the credit is filed as part of the overall North Dakota tax return. For businesses that are certified as a qualified research and development company and elect to sell, transfer, or assign unused credits, they would use Form CTS – Credit Transfer Statement jointly with the transferee, and potentially need to apply for certification as a qualified R&D company through SFN 58638 with the North Dakota Department of Commerce.

R&D Tax Credit Training for ND CPAs

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R&D Tax Credit Training for ND CFPs

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R&D Tax Credit Training for ND SMBs

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North Dakota Patent of the Year – 2024/2025

BWR Innovations LLC has been awarded the 2024/2025 Patent of the Year for their groundbreaking fuel cell technology. Their invention, detailed in U.S. Patent No. 11945338, titled ‘Fuel cell auxiliary power generation system for a vehicle’, introduces a clean, efficient solution for providing power to vehicles.

This innovative system integrates a hydrogen fuel cell, a pressurized hydrogen storage vessel, an electrical storage unit, and an inverter to deliver both AC and DC power to a vehicle. The fuel cell generates electricity by converting hydrogen into energy, while the electrical storage unit stores excess power for later use. The inverter then converts DC power into AC power, supplying electricity to the vehicle’s systems. Additionally, the system can provide heat, enhancing the vehicle’s versatility.

One of the key advantages of this system is its ability to operate independently of the vehicle’s main engine, reducing fuel consumption and emissions. This makes it an ideal solution for applications where auxiliary power is needed without running the primary engine, such as in trucks, RVs, and emergency vehicles.

BWR Innovations LLC’s invention represents a significant step forward in sustainable vehicle technology, offering a practical and eco-friendly alternative to traditional auxiliary power units.