State R&D Tax Credits

State R&D Tax Credits


Credit Name: Tax Credit for Research Activities

Expiration Date: 12/31/2010

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

Credit Carry forward: In theory, this is refundable, therefore N/A

Description: Refundable credit of 20% of QREs. Credit generated in a given tax year is distributed at 35% for the expense year and then over the next 3 years.

Other Notes: Credit available through 12/31/2010, 2011 form is only for individuals claiming a portion of their non-calendar Tax Year 2010 credit.

Hawaii joins a growing number of states realizing the importance of high-tech industry. In order to encourage research and development activities, SB1349 proposes to reinstate Hawaii’s state credit for research activities. The credit sunset at the end of calendar year 2010, while the proposed legislation provides for the research activities credit until 2015. The 20% credit allows taxpayers to offset net income tax liability and follows Federal IRC Sec. 41 Research and Experimentation guidelines.

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