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State program

New Hampshire Research and Development Credit

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  • Offset only
  • Pre-approval required

Last reviewed November 2026

At a glance

  • Jurisdiction: New Hampshire (NH)
  • Credit name: Research and Development Tax Credit (RSA 77-A:5, XIII; RSA 77-E:3-b)
  • Administering agency: New Hampshire Department of Revenue Administration (DRA)
  • Rate(s) and base: 10% of qualified manufacturing research and development wages paid in New Hampshire, measured above the IRC §41 base. Under the statute, the base may be as low as zero. Only wages count; supplies and contract research do not.
  • Refundable? No
  • Transferable? No
  • Carryforward: 5 years. An awarded credit may offset tax in the 5 following tax years.
  • Annual cap / proration:
    • Per taxpayer: $50,000 for awards through 2026, rising to $100,000 from January 1, 2027. A unitary business is treated as a single taxpayer.
    • Statewide: $7,000,000 per fiscal year, rising to $10,000,000 from January 1, 2028.
    • If applications exceed the cap, awards are prorated.
  • Pre-approval / application and deadline: Required. File Form DP-165 by June 30 following the end of the tax year in which the wages were paid. Attach federal Form 6765, or a pro-forma version if the federal return is on extension. DRA issues awards by September 30.
  • Forms:
    • Form DP-165 (Application for Research and Development Tax Credit), filed through Granite Tax Connect or by mail
    • Form DP-160 (Schedule of Business Tax Credits), with the DRA award letter, to claim the credit
  • Sunset / recent changes: No sunset. HB 1102 (2026), Chapter 338, became law on August 19, 2026, when the Governor's veto was overridden. It raises the per-taxpayer cap to $100,000 (effective January 1, 2027) and the statewide cap to $10 million (effective January 1, 2028).

What it is

New Hampshire offers a small, capped, application-based credit for wages paid to employees doing manufacturing-related research in New Hampshire. Businesses apply each year. DRA allocates credits within the statewide cap and issues award letters. The awarded credit is used first against the Business Profits Tax (BPT), and any unused portion against the Business Enterprise Tax (BET).

Who can claim it

Business organizations subject to the BPT that pay qualified manufacturing research and development wages. These are wages that are:

  • paid to employees for services performed in New Hampshire;
  • qualified research expenses under IRC §41(b);
  • for research to discover information for a new or improved manufacturing process or business component;
  • claimed for the federal §41 credit; and
  • included in the BET enterprise value tax base (RSA 77-E).

Wages claimed for this credit cannot also be claimed for the RSA 162-N economic revitalization zone credit.

How it is calculated

  1. Identify New Hampshire manufacturing R&D wages that meet the definition above. Use Section B of DP-165 to attribute Form 6765 wages to New Hampshire.
  2. Tentative credit = 10% of those qualified wages above the base. DRA applies this on DP-165.
  3. Award = the smallest of:
    • the tentative credit;
    • the taxpayer's proportional share of the statewide cap; or
    • the per-taxpayer cap ($50,000 now; $100,000 from January 1, 2027).
  4. Apply the award against the BPT first, then any unused portion against the BET. Carry forward any balance for up to 5 years.

How to claim it

  1. Apply by June 30 following the end of the tax year in which the wages were paid. File Form DP-165 (Sections A, B and C) with Form 6765 attached, or a pro-forma 6765, through Granite Tax Connect or by mail to NH DRA, PO Box 637, Concord, NH 03302-0457.
  2. Receive the DRA award letter by September 30.
  3. Claim the awarded credit on Form DP-160 with the BPT return, and the BET return if needed. Attach the award letter.
  4. Track carryforwards by award year for 5 years.

Recent changes

  • HB 1102 (2026), Chapter 338:
    • Vetoed July 10, 2026, over unrelated state park fee provisions added by the Senate. The veto was overridden on August 19, 2026 (House 231–88, Senate 24–0), and the bill became law without the Governor's signature.
    • The per-taxpayer cap in RSA 77-A:5, XIII(a)(2)(C) rises from $50,000 to $100,000, effective January 1, 2027 (Section 2).
    • The statewide cap in RSA 77-A:5, XIII(a)(1) rises from $7,000,000 to $10,000,000 per fiscal year, effective January 1, 2028 (remainder of the act).
    • The act has no separate applicability clause; the caps in force when DRA makes awards apply.
    • Awards made by September 30, 2026, on applications filed by June 30, 2026, were made under the $50,000 and $7 million limits.

Likely examiner questions

These questions illustrate what an examiner may ask about this credit. They are drafts for illustration and should be reviewed by a specialist before use. Most state claims also face standard questions: where the research was physically performed, how wages, supplies and contract research were apportioned between New Hampshire and other locations, how New Hampshire amounts reconcile to federal Form 6765, the New Hampshire credit and carryforward schedule for each year claimed, and whether the claiming entity is the one subject to New Hampshire tax.

  1. Provide Form DP-165 as filed, the DRA award letter, and Form DP-160 showing the amount used.
  2. Reconcile the qualified wages on DP-165 to federal Form 6765 and to New Hampshire payroll records.
  3. Show that each employee's wages relate to services performed in New Hampshire and to research for a new or improved manufacturing process or business component.
  4. Show that the wages were included in the BET enterprise value tax base and were not claimed for the RSA 162-N credit.
  5. For unitary groups, show that the group applied as a single taxpayer and was limited to a single cap.
  6. Show the order of use (BPT first, then BET) and the 5-year carryforward schedule by award year.

Common weak spots

  • Missing the June 30 application deadline. There is no credit without a DRA award.
  • Including supplies, contract research or non–New Hampshire wages.
  • Research not connected to manufacturing processes or business components.
  • Applying the credit against the BET before the BPT.
  • Assuming the higher caps apply to 2026. The $100,000 per-taxpayer cap applies only from January 1, 2027, and the $10 million statewide cap from January 1, 2028.
  • Unitary group members each claiming a separate cap.

Next steps

Important

This page is general information, not tax advice. Rules change; confirm current requirements with the state revenue agency or a qualified tax professional. creditARMOR is a free service. Passing this mock audit does not guarantee that your claim will pass an IRS or state examination. If needed, Swanson Reed can assist you with representation before the IRS. creditARMOR and TaxTrex are products of Swanson Reed.

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