Nebraska R&D Tax Credit

The state of Nebraska has its own set of research and development tax credits to help local businesses invest in developing new products and services. Here’s everything you need to know about the Nebraska R&D tax credit so that you can make informed decisions about launching your own business or investing in others with these incentives in mind.

Nebraska Research and Development Tax Credit Explained

Nebraska offers an R&D credit that is essentially similar to the federal tax credits available under IRC § 41. It is a refundable credit equivalent to 15% or 35% of the federal incentive for eligible taxpayers.

In other words, a business firm that incurs research and experimental costs in Nebraska can claim the R&D tax credit, which is 15% of the federal credit. On the other hand, businesses that invest in research and experimental operations on the campus of a university or college in Nebraska or at a building owned by a university or college in Nebraska are eligible for a tax credit equivalent to 35% of the federal credit.

But if your company has R&D expenses in both Nebraska and other states, the tax incentive will be split. It will cover only the cost of Nebraska-based operations.

To apply for the Nebraska research tax credit, you must submit Worksheet RD and Nebraska Form 3800N. Furthermore, you need to electronically verify the employment eligibility status of all newly employed workers in Nebraska. You also have to disclose the address of every university or college where you conduct R&D operations.

How to Calculate Nebraska Research Tax Credit

If you conduct business solely in the state and only at off-campus locations, the amount is the federal credit multiplied by 15%. However, if you do business solely in Nebraska and only at on-campus sites, the amount is the federal credit multiplied by 35%. On the other hand, if you conduct similar activities in other states as well, the amount will be split.

Nebraska R&D Tax Credit: Takeaway

Businesses engaged in R&D activities in the state are eligible for the Nebraska research and development tax credit which is equivalent to 15% of the federal credit. The amount increases to 35% of the federal credit for companies engaged in R&D activities on a university or college campus.

FAQs

What kind of companies can apply for an R&D tax credit in Nebraska?

Partnerships, LLCs, S-Corporations, C-Corporations

What is the deadline for applying for an R&D tax credit in Nebraska?

You must submit your application together with the Nebraska Tax Return.

What data do I need to calculate credit an R&D tax credit in Nebraska?

Federal Form 6765

What information do I need to provide to file an R&D tax credit in Nebraska?

Federal R&D Credit Amount

Is credit carryforward an option in Nebraska?

Yes, up to twenty years.