Fillable Form Rd - Credit For Increasing Research Activities

Schedule RD Instructions

If your business paid qualified

Lines 13 and 14

Line 30

Fixed-Base Percentage

Carryover Amount From Tax Years Prior

research and development

Follow the instructions on lines 13 and 14

to 2010

expenses in Minnesota, and those

to determine the amount of your fixed-base

The prior year carryover credit does not ap-

expenses exceed a base amount,

percentage. (Note: Only tax years beginning

ply to individuals.

in 1984 through 1988 are used to calculate

you may be entitled to this credit.

C corporations only: Enter any unused credit

the percentage.)

carried over from a tax year prior to 2010.

The credit equals 10 percent of the first

Start-up companies. If you had Minnesota

$2,000,000 of qualifying expenses over the

Attach a statement explaining amounts

sales or receipts and Minnesota qualified

base amount, and 2.5 percent of expenses

included on line 30.

research expenses in fewer than three tax

over $2,000,000.

years beginning after Dec. 31, 1983, and

Line 31

Beginning with tax year 2010, the credit is

before Jan. 1, 1989, or if the first taxable year

Limitation

refundable and partnerships and S cor-

you had both gross receipts and qualified

C corporations only: Any carryover credit

porations are allowed to pass through the

research expenses began after Dec. 31, 1983,

you claim from a tax year prior to 2010 is

refundable credit to its individual partners

your fixed-base percentage for the first five

limited. To determine your credit limitation,

and shareholders.

tax years beginning after 1993 is 3 percent

complete the worksheet below:

(line 14).

C corporations may continue to claim any

1 Regular tax from Form M4T,

carryover credits from years prior to 2010.

See IRC section 41(c)(3)(B)(ii) to figure the

line 12 . . . . . . . . . . . . . . . . . . . . .

Any current year credit must be used first

fixed-base percentage for any tax year after

2 Amount from Form M4T,

before claiming any carryover credits.

the fifth tax year beginning after 1993 for

line 16 . . . . . . . . . . . . . . . . . . . . .

which you have qualified research expenses.

3 Employer transit pass credit

Qualified Expenses

Use Minnesota qualified research expenses

from Form ETP, line 4 . . . . . . .

and sales or receipts in applying the provi-

Round amounts to the nearest whole dollar.

sions of IRC section 41(c)(3)(B)(ii).

4 Subtract step 3 from step 2. If the

Lines 1–6

result is zero or less, enter 0 . . .

Line 29

Qualified research expenses are the same

5 Amount from step 1 or step 4,

2012 Refundable Credit

kinds of expenses and payments that

whichever is less . . . . . . . . . . . .

Individuals: Include the credit on Schedule

qualify for the federal credit for increasing

6 Current year research credit

M1B, line 1.

research activities except that they must be

from Schedule RD, line 29 . . .

for research done in Minnesota. Include

C corporations: Include the credit on Form

7 Subtract step 6 from step 5. If the

your qualified Minnesota research expenses

M4, line 6.

result is zero or less, enter 0 . . .

paid or incurred in the taxable year on

Partnerships: For your individual, estate

lines 1 through 5.

Enter the result from step 7 on line 31.

and trust partners, pass the amount, pro

Qualified research expenses also include

rata, on Schedule KPI, line 14. For your

Carryover

contributions to qualified nonprofit organi-

partnership and corporate partners, pass the

zations that are operated to make grants to

amount, pro rata, on Schedule KPC, line 18.

Any unused portion of your tentative car-

small, technologically innovative enterprises

However, partners electing to file composite

ryover credit on line 30 may be carried

in Minnesota during their early develop-

returns are not entitled to this credit.

forward to each of the 15 tax years succeed-

ment stages. Include these contributions on

ing the credit year.

Attach Schedule RD when you file your

line 6.

Form M3.

Information and Assistance

Base Amount

S corporations: Pass the amount through,

Website:

pro rata, to shareholders on Schedule KS,

Lines 8–12 and 15–18

Email:

BusinessIncome.tax@state.mn.us

line 14. However, shareholders electing to

The base amount is calculated in the same

Phone: 651-556-3075

file composite returns are not entitled to

way as it is under federal law, except that

TTY: Call 711 for Minnesota Relay

this credit.

expenses must be for research done in

We’ll provide information in other formats

Attach Schedule RD when you file your

Minnesota. Also, your Minnesota sales or

upon request to persons with disabilities.

Form M8.

receipts that you used to apportion income

are used instead of your gross receipts to

calculate the base amount.

Enter your Minnesota sales and receipts and

qualified research expenses for the indicated

tax years in the appropriate columns.

Form Rd - Credit For Increasing Research Activities - 2012 Page 2

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