Qualified Production (RV-F700002): Qualified Production Credit (Revision 2025-09)
Tennessee · Tennessee DOR · Used for tax years 2025
Schedule QP calculates Tennessee’s Qualified Production Credit for qualified payroll expenses against combined franchise and excise tax liability. It reports current-year expenses, available credits, and the credit usable in the current year, while Schedule QPCF tracks credit car
Who files this form
Schedule QP is for applicants claiming the Qualified Production Credit for qualified payroll expenses against their combined Tennessee franchise and excise tax liability.
The credit requires prior approval from the Commissioners of Revenue and Economic and Community Development.
What you'll need
Attach the letter showing the approved amount of qualified payroll expenses.
To complete the schedules, have these details available:
- Your taxable year, taxpayer name, and account number or FEIN.
- Total qualified payroll expenses for the current fiscal year, including amounts paid to people whose primary residence is in each enhancement county tier.
- Schedule A, line 3; Schedule B, line 5; and Schedule D, lines 1 through 7.
- For carryover credits, the originating tax period, original or corrected credit amount, amounts used in prior years, and expired amounts.
Common mistakes
- Changing Schedule QPCF alone does not update Department records. If a credit adjustment has not previously been reported, report it on the applicable Departmental form, such as an amended FAE170 or Federal Income Revision form, or by correspondence.
Questions people ask
How is the current-year credit calculated?
Multiply Schedule QP, line 2, by 40% and line 3 by 50%, then add the results. Line 2 covers qualified payroll expenses paid to people whose primary residence is in a tier 1 enhancement county. Line 3 covers those in tier 2, 3, or 4 enhancement counties.
How much credit can I use this year?
The credit taken, including carryovers, is limited to 50% of combined franchise and excise tax liability. Schedule QP, line 12, must be the smallest of line 6, total credit available; line 8, the 50% limit; or line 11, tax remaining before the Qualified Production Credit. Also enter that amount on Schedule D, line 8.
Can unused credit be carried forward?
Yes. Unused credit may be carried forward for up to 25 years or until fully used, whichever comes first. The oldest credit within the 25-year carryover period is used first.
How do I report carryover credit?
Complete Schedule QPCF, listing the oldest tax period first. For each period, subtract amounts already used or expired from the credit amount. Enter the total available carryover on Schedule QP, line 5.