Are R&D Tax Credits
Available in New Hampshire?
Yes. New Hampshire offers a permanent R&D Tax Credit against the Business Profits Tax (BPT) and the Business Enterprise Tax (BET). The credit applies to qualified manufacturing research and development expenditures (wages that also qualify under IRC §41) incurred within New Hampshire.
Credit is first applied against the BPT, with any excess applied against the BET.
If statewide claims exceed $7 million in a year, credits are reduced proportionally.
Carryforward:
Unused credits may be carried forward for 5 years.
Unitary businesses are treated as one taxpayer when claiming the credit.
Credit amount is the lesser
10% of qualified manufacturing R&D expenditures over the base amount, or
$50,000 per taxpayer.
Application process
Submit Form DP-165 to the New Hampshire Department of Revenue Administration (NH DRA).
Must be postmarked by June 30 following the taxable year in which R&D occurred.
Attach Federal Form 6765.
New Hampshire R&D Tax Credit Case Study
A Concord-based company specializing in high-tech electronic components conducted a multi-year R&D study. The company had been claiming R&D credits annually for its engineering activities.
Through this project, the company qualified for:
$271,832 in federal R&D Tax Credits
$50,000 in New Hampshire state R&D Tax Credits
FEDERAL | NEW HAMPSHIRE | |||
Year | Total QREs | Credit | Total QREs | Credit |
2024 | $1,200,000 | $127,166 | $1,000,000 | $50,000 |
2023 | $850,000 | $92,166 | N/A | N/A |
2022 | $500,000 | $52,500 | N/A | N/A |
Total | $2,550,000 | $271,832 | $1,000,000 | $50,000 |
Federal R&D Tax Credit Summary
Year | Total QREs | Credit |
2024 | $1,200,000 | $127,166 |
2023 | $850,000 | $92,166 |
2022 | $500,000 | $52,500 |
Total | $2,550,000 | $271,832 |
New Hampshire R&D Tax Credit Summary
Year | New Hampshire Credit |
2024 | $50,000 |
2023 | NA |
2022 | NA |
Total | $50,000 |
Criteria for Qualifying Research Activities
The four-part test below defines what counts as qualified research activities
Purpose of the Research
The activity should develop or improve a business component, such as a product, process, software, formula, technique, or invention, by enhancing functionality, performance, reliability, or quality.
Resolving Uncertainty
The work must address technical uncertainties, such as determining the optimal design, method, or approach to achieve the desired outcome. The results should not be known in advance.
Systematic Experimentation
Eligible research must follow a structured experimentation process, including trial and error, modeling, simulation, or testing alternatives to reach the intended improvement.
Technological Basis
The activity must rely on hard sciences such as engineering, physical or biological sciences, or computer science. Artistic, social science, or routine data collection work does not qualify.
Why the R&D Tax Credit Matters ?
Since 1981, the R&D Tax Credit has helped businesses save billions in federal and state taxes. The credit enables companies to hire more staff, expand R&D, invest in facilities, and drive innovation. Thousands of businesses across multiple industries take advantage of this benefit each year.