RD: Credit for Increasing Research Activites (2024)
Minnesota · Minnesota DOR · Used for tax years 2024
Minnesota’s 2024 Schedule RD calculates a corporation’s Credit for Increasing Research Activities. It reports qualified research expenses in Minnesota, the credit calculation, credit allocations among members of a combined return, and credit carryovers.
Who files this form
Use 2024 Schedule RD to claim the Credit for Increasing Research Activities. Your business may qualify if it paid qualified research and development expenses in Minnesota that exceed a base amount.
- Partnerships and S corporations may pass the credit through to partners and shareholders.
- Partners and shareholders who elect to file composite returns are not entitled to this credit.
- Unitary businesses must complete a separate Schedule RD for each corporation claiming the credit.
What you'll need
Have the following information and attachments ready:
- The corporation’s name, FEIN, and Minnesota Tax ID.
- Qualified Minnesota research expense amounts, including wages, supplies, computer-use costs, contract expenses, basic research payments, and qualifying nonprofit contributions.
- Minnesota sales and receipts and qualified research expense information for the tax years requested on the schedule.
- A copy of federal Form 6765 to attach with Schedule RD to your Minnesota return.
- If claiming credit from a partnership, Schedule KPC, line 28, and a statement explaining the amount entered on Schedule RD, line 30.
- If sharing credits within a unitary group, the required schedules showing credit calculations or identifying the members that generated the credits.
If someone helped calculate or prepare the credit or conducted a research credit study, provide that person’s name, company, title, and phone number. If more than one person helped, attach a schedule for each person with this information.
How to file
Attach Schedule RD and a copy of federal Form 6765 to your Minnesota return.
- C corporations: Enter the 2024 credit from Schedule RD, line 45, on Form M4T, line 14.
- Partnerships: Attach Schedule RD to Form M3. Pass the credit through proportionally on Schedule KPI, line 26, for individual, estate, and trust partners, or Schedule KPC, line 28, for partnership and corporate partners.
- S corporations: Attach Schedule RD to Form M8. Pass the credit through proportionally to shareholders on Schedule KS, line 26.
Completely fill out the Additional Information section on page 3.
Common mistakes
- Including ineligible wages: Do not include wages used to figure the work opportunity credit.
- Including research outside Minnesota: Qualified expenses must be for research done in Minnesota. Page 3 states that expenses cannot be claimed if you answer “No” to the Minnesota-location questions for wages or contracted research.
- Including grant-funded expenses: Do not include expenditures funded by a DEED Innovation Grant on lines 1 through 6.
- Skipping rounding: Round amounts to the nearest whole dollar.
- Exceeding the fixed-base percentage limit: Do not enter more than 16% on line 14.
- Mixing up carryover credits: Line 39 may include only prior-year credits earned by the corporation completing the schedule, not credits earned by other unitary group members.
- Leaving page 3 incomplete: Completely fill out the requested Additional Information.
Questions people ask
How is the research credit calculated?
The credit equals 10% of the first $2,000,000 of qualifying expenses over the base amount, plus 4% of expenses over that $2,000,000 amount.
Which research expenses qualify?
Generally, the same kinds of expenses and payments that qualify for the federal research credit qualify here, but the research must be done in Minnesota. Certain contributions to qualified nonprofit organizations supporting small, technologically innovative Minnesota enterprises during early development also qualify.
Is there a limit on the credit I can use?
Yes. The credit is limited to the regular franchise tax or the liability for tax, whichever is less. The instructions for line 32 explain the calculation using Form M4T.
Can unused credit be carried forward?
Yes. After applying credit to other unitary group members as required, any remaining credit must be carried forward by the member that earned it. That member can carry it forward for 15 years.
Where can I get help?
Visit www.revenue.state.mn.us, email BusinessIncome.tax@state.mn.us, or call 651-556-3075.