Fillable Form Rd - Credit For Increasing Research Activities

Schedule RD Instructions

If your business paid qualified

Start-up companies. If you had Minnesota

Line 31

sales or receipts and Minnesota qualified

Tentative credit

research and development

research expenses in fewer than three tax

Unitary businesses: If more than one

expenses in Minnesota, and those

years beginning after Dec. 31, 1983, and

entity included on your combined return is

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

expenses exceed a base amount,

claiming the Credit for Increasing Research

you had both gross receipts and qualified

Activities complete lines 31 through 33 on

you may be entitled to this credit.

research expenses began after Dec. 31, 1983,

one Schedule RD only and use the sums of

The credit equals 10 percent of the first

your fixed-base percentage for the first five

the amounts on lines 29 and 30 to calculate

$2,000,000 of qualifying expenses over the

tax years beginning after 1993 is 3 percent

the group’s tentative credit.

base amount, and 2.5 percent of expenses

(line 14).

Line 32

over $2,000,000.

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

Limitation

fixed-base percentage for any tax year after

Beginning with tax year 2010, partnerships

Your credit is limited to the regular franchise

the fifth tax year beginning after 1993 for

and S corporations are allowed to pass

tax or the liability for tax, whichever is less.

which you have qualified research expenses.

through the credit to its individual partners

Enter the lesser of Form M4T, line 12, or the

Use Minnesota qualified research expenses

and shareholders.

difference of Form M4T, line 16 minus line

and sales or receipts in applying the provi-

21. If the result is less than zero, enter zero.

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

Qualified Expenses

Unitary businesses: Use the sums of the

Round amounts to the nearest whole dollar.

Line 29

amounts for all members included on the

2013 Credit

combined return when calculating the

Lines 1–6

Individuals: Include the credit on Schedule

limitation.

Qualified research expenses are the same

M1B, line 1.

kinds of expenses and payments that

Carryover

qualify for the federal credit for increasing

C corporations: Complete lines 30 through

research activities except that they must be

Any unused portion of your tentative credit

33.

for research done in Minnesota. Include

on line 31 may be carried forward to each of

Partnerships: For your individual, estate

your qualified Minnesota research expenses

the 15 tax years succeeding the credit year.

and trust partners, pass the amount, pro

paid or incurred in the taxable year on

rata, on Schedule KPI, line 14. For your

lines 1 through 5.

Information and Assistance

partnership and corporate partners, pass the

Website:

Qualified research expenses also include

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

contributions to qualified nonprofit organi-

However, partners electing to file composite

Email:

BusinessIncome.tax@state.mn.us

zations that are operated to make grants to

returns are not entitled to this credit.

Phone: 651-556-3075

small, technologically innovative enterprises

TTY: Call 711 for Minnesota Relay

Attach Schedule RD when you file your

in Minnesota during their early develop-

Form M3.

We’ll provide information in other formats

ment stages. Include these contributions on

upon request to persons with disabilities.

line 6.

S corporations: Pass the amount through,

pro rata, to shareholders on Schedule KS,

Base Amount

line 14. However, shareholders electing to

file composite returns are not entitled to

Lines 8–12 and 15–18

this credit.

The base amount is calculated in the same

Attach Schedule RD when you file your

way as it is under federal law, except that

Form M8.

expenses must be for research done in

Minnesota. Also, your Minnesota sales or

Line 30

receipts that you used to apportion income

Carryover Credit and Any Credit from a

are used instead of your gross receipts to

Partnership

calculate the base amount.

Enter any unused credit carried over from

Enter your Minnesota sales and receipts and

a prior tax year beginning before January 1,

qualified research expenses for the indicated

2010 or after December 31, 2012.

tax years in the appropriate columns.

Also include any credit amounts you may

Lines 13 and 14

have received as a partner of a partnership

(from line 17 of Schedule KPC). Cred-

Fixed-Base Percentage

its from a partnership are limited to the

Follow the instructions on lines 13 and 14

amount of tax attributable to your share of

to determine the amount of your fixed-base

the partnership’s taxable income.

percentage. (Note: Only tax years beginning

in 1984 through 1988 are used to calculate

Attach a statement explaining amounts

the percentage.)

included on line 30.

Form Rd - Credit For Increasing Research Activities - 2013 Page 2

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