Utah R&D Tax Credit Summary

UTAH R&D TAX CREDIT SUMMARY

Utah State R&D Tax Credit

Utah offers a tax credit for research activities conducted in Utah, detailed within Utah Code Section 59-10-1012.

The credit amount equals the sum of the following three expenses:

  • a research tax credit of 5% of the taxpayer’s qualified research expenditures for the current taxable year exceeding a base amount
  • a 5% credit for payments to qualified organizations for basic research as provided in IRC §41(c) for the current taxable year that exceeds a base amount; and
  • a tax credit of 7.5% of qualified research expenses in Utah for the current taxable year
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    The base amount is calculated as provided in IRC §41(c) and IRC §41(h), except that:

    • it does not include the alternative incremental credit provided for in IRC §41(c)(4)
    • the taxpayer’s gross receipts include only those amounts attributable to Utah sources under the allocation and apportionment provisions; and
    • 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)

    How to Obtain the Credit?

    The credit amount should be entered on Utah Form TC-40A, Income Tax Supplemental Schedule, Part 4, using code 12.

    Refundable/Transferable Tax Credit – No

    Carryforward

    For the first two amounts above, any excess credit not used for the taxable year in which it is earned may
    be carried forward as a credit for the next 14 taxable years. Any unused credit under the third amount above
    may not be carried forward.

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