N-346A: Certified Statement of Research and Development Costs Incurred by a Qualified High Technology Business (QHTB) and Claim of the Tax Credit for Research Activities (2024)
Hawaii · Hawaii DoTax · Used for tax years 2024
Hawaii Form N-346A is a certified statement of research and development costs incurred by a qualified high technology business (QHTB) and a claim for the tax credit for research activities. It reports eligible research expenses, the portion attributable to research conducted in H
Who files this form
A qualified high technology business (QHTB) must submit completed Form N-346A before it can claim or distribute the Hawaii tax credit for research activities.
- The business must have claimed, or plan to claim, the federal credit for increasing research activities for the expenses reported on line 1g.
- Expenses for research activities outside Hawaii do not qualify for the Hawaii credit.
- A nonprofit organization exempt from taxation under Internal Revenue Code section 501(c) cannot claim the Hawaii credit.
When it's due
For tax year 2024, the supplied form says Form N-346A must be submitted on or before March 30 to the Department of Business, Economic Development, and Tourism (DBEDT). The form does not print a calendar year for this deadline.
What you'll need
Have the following information and attachments ready:
- The QHTB's name as shown on its tax return, SSN or FEIN, mailing address, and contact information.
- Eligible research expense amounts to be reported on federal Form(s) 6765, the portion attributable to Hawaii research, and the federal credit amount.
- All supplemental schedules.
- A brief description of the research projects. Attach a separate sheet if needed.
- For a partnership, S corporation, estate, trust, or cooperative: a list of the partners, shareholders, beneficiaries, or patrons, their SSNs or FEINs, and each person's allocated or distributive share of the credit.
When claiming the credit, attach the completed Part II to Form N-346. If the QHTB is a flow-through entity, also attach the Schedule K-1 issued by the QHTB showing the taxpayer's share of the credit.
How to file
- Complete Part I and attach all supplemental schedules. An authorized signer must sign and date the declaration and provide their printed name and title.
- Complete lines 1 through 3 of Part II, then submit the form to DBEDT for certification. The supplied text does not give a submission address or specify mail or e-file submission options.
- DBEDT will complete Part II and mail it to the QHTB at the address reported on page 1.
- Attach a copy of completed Part II to Form N-346, Tax Credit for Research Activities. Part II also directs attachment to the applicable return: Form N-11, N-15, N-20, N-30, N-35, N-40, or N-70NP. Include the QHTB-issued Schedule K-1 if the QHTB is a flow-through entity.
Common mistakes
- Including expenses for research outside Hawaii as qualifying Hawaii expenses. The form expressly excludes them.
- Including wages used to figure the federal work opportunity credit on line 1c. The form says not to include those wages.
- Claiming the Hawaii credit when line 5 is answered “No” or line 7 is answered “Yes.” The form says these answers prevent a Hawaii credit claim.
- Forgetting supplemental schedules. Part I requires all supplemental schedules to be attached.
- Treating DBEDT certification as approval of eligibility. The audit notice says certification only acknowledges receipt of the information, and all credit claims remain subject to audit.
Questions people ask
How is the tentative Hawaii credit calculated?
Divide Hawaii eligible research expenses on line 1g, Column B, by total eligible research expenses on line 1g, Column A. Round that decimal to six places, then multiply it by the federal tax credit from Form 6765 entered on line 3.
How should I round dollar amounts?
The form directs you to round all dollar entries to the nearest whole dollar.
Who completes Part II?
The QHTB completes lines 1 through 3. DBEDT certifies Part II and mails the completed part to the QHTB's address shown on page 1.
Does certification mean the credit cannot be challenged?
No. The certification is based solely on taxpayer-provided information and acknowledges its receipt. The Department reserves the right to challenge all or part of the credit claim.