State R&D Tax Credits


Credit Name: Tax Credit for Research Activities

Expiration Date: 12/31/2024

Does it apply to C corps and pass-through entities?: Yes

Credit Carry forward: N/A – Refundable credit

Description: Credit is calculated as a percentage of the federal research credit, determined by the fraction of Hawaii research expenses to federal research expenses. Hawaii conforms to IRC §41 for the definition of qualified expenses and qualifying activities.

Other Notes:

  • Must be a high technology business (business that conducts at least 50% of their activities in qualified research
  • Must claim the federal research credit
  • Taxpayer must submit a written statement to the department of business, economic development, by March 31 of each year in which qualified research expenses were incurred in the previous taxable year.
  • Credit must be claimed within 12 months after the close of the taxable year.
  • Annual credit cap of $5 million, certified on a first-come, first-served basis.

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