Research & Development Tax Credit

During the 2007 session, the New Hampshire Legislature enacted a research and development credit against business taxes paid to the State of New Hampshire, see Technical Information Release 2007-007. Under the 2007 Laws of New Hampshire, Chapter 271, the Legislature had designated $1,000,000 for each of the next five fiscal years to be available to fund the credit. During the 2013 session, Senate Bill 1 (Chapter 5, Laws of 2013) was passed increasing the award to $2,000,000, effective May 20, 2013, see Technical Information Release 2013-001. Senate Bill 1 also repealed the prospective repeal date of the credit. During the 2015 session, House Bill 2 (Chapter 276, Section 241, Laws of 2015) was passed increasing the award to $7,000,000, effective July 1, 2017, see Technical Information Release 2015-005.

Qualified manufacturing research and development expenditures are wages paid to employees of the business organization for services rendered in New Hampshire which qualify and are reported as a credit by the business organization under section 41 of the Internal Revenue Code. More specifically, qualified manufacturing research and development expenditures are the wage amounts attributable to New Hampshire that make up lines 5 or 24 of the business organization's Federal Form 6765.

Business organizations that have expenditures made during the fiscal year for qualified manufacturing research and development. "Qualified manufacturing research and development" expenditures are wages paid to employees of the business organization for services rendered in New Hampshire which qualify and are reported as a credit by the business organization under section 41 of the Internal Revenue Code. More specifically, "qualified manufacturing research and development" expenditures are the wage amounts attributable to New Hampshire that make up lines 5 or 24, of the business organization's Federal Form 6765.

Applications shall be postmarked no later than June 30 following the taxable period during which the research and development expenditure was made or incurred. The Department will send acknowledgment letters to all applicants by July 31. Applicants will be notified, by mail, of award amounts granted to them by September 30.

Taxpayers must postmark their complete R&D application Form DP-165 with the required Federal Form 6765 attached, by June 30 following the tax year during which the R&D occurred. Once applicants have successfully submitted a complete application with the required documentation, a confirmation of receipt will be sent to the applicant's contact and mailing address as it appears on the application. If the application is not complete, the applicant will be notified.

The business organization may take the credit awarded by the Department against business taxes due within the subsequent five taxable periods following the taxable period during which the qualified manufacturing research and development expenditures occurred, by attaching a copy of the R&D Award Letter to its business tax return. The credit is first applied against the Business Profits Tax. Any remainder may be applied against the Business Enterprise Tax.

All applicants must attach a copy of their Federal Form 6765 with the form DP-165. If your federal return is not due yet or you are filing on extension which interferes with the June 30 deadline, please submit a pro-forma or draft copy of your Form 6765. This must be submitted with the application, or it will be considered incomplete.

A determination of the award amount will be made by the Commissioner no later than September 30. Applicants will be notified, by mail, of award amounts granted to them by September 30. Taxpayers must attach a copy of the R&D award letter to their business tax return when they file and claim the credit on the DP-160 and/or the BET return. Business Tax forms may be obtained by visiting our Forms & Instructions page. 

You can now file your documents and pay taxes due using our online portal, Granite Tax Connect at https://gtc.revenue.nh.gov/.

If the total amount requested by all applicants has exceeded the allowable award amount during the year of the program, the requested amounts are prorated for all applicants who filed a completed application on time.

The amount of the credit shall be the lesser of 10% of the business organization's qualified manufacturing research and development expenditures or $50,000. In any given fiscal year, in the event that the aggregate amount of credits applied for exceeds $7,000,000, all credits for that year shall be reduced proportionately.

Unitary businesses and enterprises consisting of more than one taxpayer shall be considered a single taxpayer for purposes of claiming the credit.

The Research and Development Tax Credit Application, form DP-165, is available on the Department's website on the Forms & Instructions page under the Business Taxes topic, or by calling the Department's Forms Line at (603) 230-5001.

Please contact the Department at (603) 230-5920 if you have any questions or concerns regarding this program.