Utah R&D Tax Credit Summary
Utah offers a tax credit for research activities conducted in Utah, detailed within Utah Code Section 59-10-1012. The Utah R&D Tax Credit is a non-refundable tax credit available to taxpayers with qualifying research expenditures in Utah. The Utah R&D Tax Credit mirrors the federal Section 41 Credit for Increasing Research activities with a few exceptions.
UT R&D Credit Summary
Utah R&D tax credit is the sum of:
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5% of qualified research expenses in Utah for the current tax year that exceed a base amount;
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5% of payments made to a qualified organization for basic research (as provided in IRC §41(c)) in Utah for the current taxable year that exceed a base amount; and
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7.5% of qualified research expenses for the taxable year.
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Effective retroactive to taxable years beginning on or after January 1, 2012, a tax credit of 7.5% of qualified research expenses for the current taxable year (9.2% for taxable years beginning on or after January 1, 2010 and before January 1, 2012; 6.3% for 2009; and 5% for 2008)
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There are two methods to calculate the base amount: Regular Credit (RC) and Alternative Simplified Credit (ASC) method. The base amount is calculated as provided in IRC §41(c) and IRC §41(h), except that:
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it does not include the alternative incremental credit provided for in IRC §41(c)(4);
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the taxpayer’s gross receipts include only those amounts attributable to Utah sources under the allocation and apportionment provisions; and
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for purpose of calculating the base amount, a taxpayer may make an irrevocable election to be treated as a start-up company regardless of whether the taxpayer meets the requirements of IRC §41(c)(3)(B)(i)(I) or IRC §41(c)(3)(B)(i)(II).
Eligible Entities: C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing: Due with Utah Tax Return
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The credit amount should be entered on Utah Form TC-40A, Income Tax Supplemental Schedule, Part 4, using code 12.
Data Required to Compute Credit:
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Claim Period Federal Qualified R&D Expenses (QREs)
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Claim Period Utah QREs
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Utah QREs for Prior 3 Years
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Utah Gross Receipts for Prior 4 Years
Credit Carryforward:
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5% of qualified research expenses in Utah for the current tax year that exceed a base amount
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"5% of Payments" may be carried forward as a credit for the next 14 taxable years
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5% of payments made to a qualified organization for basic research in Utah for the current taxable year that exceed a base amount
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"5% of Payments" may be carried forward as a credit for the next 14 taxable years
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7.5% of qualified research expenses for the taxable year.
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Any unused credit under the 7.5% QRE amount may not be carried forward.
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Refundable/Transferable Tax Credit: No
Important Links and Forms: