State R&D Tax Credits
Credit Name: DR 0077 – Research and Development Income Tax Credit for Enterprise Zones
Expiration Date: Permanent
Does it apply to C corps and pass-through entities?: Yes
Credit Carry forward: No Carry Back. Unlimited Carry Forward
Description: 3% credit for companies in an enterprise zone on the increase over the average expenditures for the previous 2 years. Criteria match the federal definition with the additional exclusion of research funded by any government entity. The calculated credit is divided evenly between the tax year that generated the credit and the next three years. Federal limitation using only 65% of contract research expenditures does not apply.
Other Notes: All included expenditures must be in an enterprise zone. If a company moves zones, use only expenditures in that zone for calculation. Beginning January 1, 2012, companies must pre-certify with the zone administrator prior to credit generation. Additionally, any credits for tax years beginning prior to January 1, 2012, certification must be submitted by December 31, 2012. Effectively, this means that starting January 1, 2012, taxpayers cannot incur research credits on any research done prior to pre-certification and as of January 1, 2013, taxpayers will not be able to amend tax returns for credits unless they have pre-certified.