State R&D Tax Credits

State R&D Tax Credits


Credit Name: Research and Development Tax Credit

Expiration Date: None

Does it apply to C corps and pass-through entities?: No restrictions to entity type – may be applied to Corporate Net Income Tax, Personal Income Tax, and Capital Tax/Foreign Franchise Tax

Credit Carry forward: May be carried forward up to 15 succeeding taxable years

Description: One calculation method following the traditional federal calculation method except expenses and base amount are for amounts in Pennsylvania only. Large companies are entitled to a 10% tax credit and small companies (less than $5 million in total assets at the beginning or end of the tax year) are entitled to a 20% credit. The total amount allocated for the program is $55 million, with $11M set aside specificall for small business.

Other Notes:

  • Must apply for the credit by September 15 of the year following the tax year, with notification received December 15. Credit then offsets tax for the next tax year (2012 Credits will offset 2013 Tax).
  • Credit amounts are prorated against the rest of the claims to allocate the total $55 million amount.
  • Taxpayer may sell unused credits.
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