Connecticut · research and development · CT-RE-001
Research and Experimental Expenditures Credit
Publication revised September 24, 2026. Sourcebook page 70.
Credit amount / calculation
20% of Connecticut research and experimental expenditures above the preceding income year.
Business fit and eligible activity
Separate credit for increases in qualifying research and experimental spending. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Eligibility and practical use
For forest products, research credits usually live on the mill floor rather than in a laboratory. Scanner settings, drying schedules, process-control changes, product testing, and equipment modifications can matter when the work is experimental rather than routine. A logging company has a narrower path, but equipment-control, software, or process-development work can sometimes qualify if it satisfies the same technical tests.
Illustrative business benefit
Qualified expenditures of $300,000 this year versus $200,000 last year produce ($300,000 - $200,000) x 20% = $20,000. At the standard 65% small-business exchange rate, an eligible taxpayer with no tax liability could receive $13,000 instead of carrying that credit forward.
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit.
Official sources
Related programs
Fixed Capital Investment Credit
5% of eligible fixed-capital investment
Credit for qualifying fixed capital acquired by a Connecticut business.
Human Capital Investment Credit
10% of eligible training
Qualified training and human-capital spending can earn a credit.
Machinery and Equipment Expenditure Credit
10% of the increase in eligible machinery
Manufacturers can obtain a credit tied to qualifying machinery and equipment expenditures.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.
Rehabilitation Credit (Internal Revenue Code §47)
Generally
A forest-products company rehabilitating a certified historic mill or industrial building for income-producing use may qualify.