RD: Credit for Increasing Research Activities (2025)
Minnesota · Minnesota DOR · Used for tax years 2025
Minnesota’s 2025 Schedule RD calculates a corporation’s Credit for Increasing Research Activities. It reports qualified research expenses in Minnesota, the credit calculation, refundable and nonrefundable credit amounts, and credit carryovers.
Who files this form
Use 2025 Schedule RD to claim Minnesota’s Credit for Increasing Research Activities. Your business may qualify if it paid qualified research and development expenses in Minnesota that exceed a base amount.
- C corporations use the schedule to calculate their credit.
- Partnerships and S corporations may pass the credit through to partners and shareholders. Partners and shareholders electing 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 these items available to complete and attach to your return, as applicable:
- Your corporation’s name, FEIN and Minnesota Tax ID.
- Amounts for qualified Minnesota research expenses, including wages, supplies, computer-use costs, contract research, basic research payments and qualifying nonprofit contributions.
- Minnesota sales or receipts and qualified research expense amounts for the historical years requested on the schedule, including 1984–1988 and 2021–2024. Start-up companies should follow the special fixed-base percentage instructions.
- A copy of federal Form 6765, which must be attached with Schedule RD.
- Schedule KPC, line 28, for credits received from a partnership, plus a statement explaining the amount entered on line 30.
- Applicable schedules showing credits allocated to other combined-return members or identifying members whose credits you received.
- The name, title, company and phone number of anyone who helped calculate or prepare the credit or conducted a research credit study. If more than one person assisted, attach a schedule for each.
How to file
Attach Schedule RD and a copy of federal Form 6765 to your Minnesota return.
- C corporations: Complete lines 31 through 46. Include the refundable amount from line 37 on Form M4, line 7. Enter the nonrefundable amount from line 46 on Form M4T, line 14.
- Partnerships: Attach Schedule RD to Form M3. Pass the credit through proportionately 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 proportionately on Schedule KS, line 26.
Complete the Additional Information questions on page 3 and attach any required supporting statements or schedules.
Common mistakes
- Including research performed outside Minnesota. Research does not qualify merely because it was ordered from Minnesota or connected to research and development conducted in Minnesota.
- Including excluded wages or grant-funded costs. Do not include wages used to figure the work opportunity credit or expenditures funded by a DEED Innovation Grant.
- Using the federal alternative simplified method. Minnesota does not conform to that method for determining the base amount.
- Missing the refundable-credit election box. You must check the box to claim a refundable portion on line 37. If you do not elect it, enter $0 on line 37.
- Putting another group member’s prior-year credit on line 41. That line is only for carryovers belonging to the corporation completing the schedule.
- Skipping rounding or additional information. Round amounts to the nearest whole dollar and completely fill out the requested Additional Information.
Questions people ask
How is the credit calculated?
The credit equals 10% of the first $2,000,000 of qualifying expenses over the base amount, plus 4% of qualifying expenses over that $2,000,000 amount.
Can part of the 2025 credit be refundable?
Yes. If a 2025 credit amount remains on line 36 after allocation to other group members, you may elect a refundable portion. Check the election box and multiply line 36 by 19.2%. The refundable portion is calculated before prior-year carryforwards are applied.
Can unused credit be carried forward?
Yes. Credit remaining after being applied to other members must be carried forward by the member that earned it. That member can carry the credit forward for 15 years.
Do qualifying nonprofit contributions count as research expenses?
Yes. Qualified expenses include contributions to qualified nonprofit organizations operated to make grants to small, technologically innovative Minnesota enterprises during their early development stages. Enter these contributions on line 6.
Where can I get help?
Visit www.revenue.state.mn.us or email BusinessIncome.tax@state.mn.us.