North Carolina R&D Credit Overview – Extended Through 2015

The Technology Development Tax Credit in North Carolina has been renamed the Research & Development (R&D) tax credit as of mid-2013 but the same rules apply and this credit is now extended through 2015.

Taxpayers may claim eligible R&D expenses for the North Carolina research credit if the QREs (as defined under the Federal rules) were incurred in North Carolina. Depending upon the location of the R&D within North Carolina, different rates apply. R&D expenses in a Tier 1 area are assigned a higher rate than Tier 2 or 3. Also, small businesses obtain a 3% R&D credit.

R&D Credit Tied to Health Insurance

North Carolina also requires health insurance information from the employer – the company must provide health insurance to employees at the time when the North Carolina R&D expenditures are undertaken and must provide proof of insurance with the R&D credit filing to obtain the credit in the current year.

Eco-Industrial Park Incentives/Credits

Starting in 2011, North Carolina offers several lucrative tax benefits for activities within an ‘Eco-Industrial Park’ which include an enhanced R&D tax credit – the credit is a generous 35% of expenses incurred within an Eco-Industrial Park in order to incentivize R&D within these new parks.

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