Forest ProductsTax Credit Sourcebook

New Hampshire · Research and Development · NH-RD-001

Research and Development Tax Credit

Publication revised September 24, 2026. Sourcebook page 184.

Credit amount / calculation

The tentative credit is 10% of qualifying New Hampshire manufacturing research and development employee wages exceeding the applicable federal §41 base amount, with the state's provision that the minimum base may be zero. The actual award is the lesser of the calculated amount, the taxpayer's proportional share of the statewide allocation, and the applicable per-taxpayer cap. A unitary business is one taxpayer for this purpose. Rule in enacted law Limit and effective date Per-taxpayer cap effective through December 31, 2026 $50,000 Per-taxpayer cap effective January 1, 2027 $100,000 Statewide fiscal-year allocation under the provision effective before January 1, 2028 $7 million Statewide allocation under the provision effective January 1, 2028 $10 million Application-cycle effect. Calendar-year 2026 research is claimed in the 2027 award cycle, which uses the $100,000 per-taxpayer cap and the $7 million statewide pool. The pool increases to $10 million on January 1, 2028.

Business fit and eligible activity

Qualifying wood-products manufacturing process or product development can fit. Eligible costs are employee wages for qualifying services performed in New Hampshire, treated as qualified research wages under federal §41, reported in the federal research-credit claim, and included in the New Hampshire business enterprise tax compensation base. Supplies, contract research, capital equipment, and all-purpose engineering expenditure are not substituted for this wage-only base. Routine logging or purchasing machinery does not establish eligibility; a forestry business must substantiate the qualifying manufacturing-process or business-component research and every wage test. The same wages cannot also receive the credit under RSA 162-N.

Illustrative business benefit

Assume $500,000 of qualifying New Hampshire employee wages and a correctly determined $300,000 statutory base. The tentative credit is ($500,000 - $300,000) × 10% = $20,000. This amount is below the $100,000 taxpayer cap for the 2027 award cycle. Assume the final award remains $20,000 after statewide allocation. On the first return on which the award may be used, assume $12,000 of eligible business profits tax liability and $3,000 of eligible business enterprise tax liability. Apply $12,000 to business profits tax and $3,000 to business enterprise tax, for $15,000 of tax savings. The remaining $5,000 is available only within the applicable statutory use window. If allocation reduces the award, recompute from the award notice; do not present $20,000 as guaranteed.

Timing / first action

File Form DP-165 by June 30 following the taxable period in which the research occurred. The commissioner determines the final award by September 30. A calendar-year taxpayer claiming 2026 research must apply by June 30, 2027. The $100,000 per-taxpayer cap applies to that application and award cycle. The statewide pool remains $7 million for this cycle; it increases to $10 million on January 1, 2028. If timely requests exceed the pool, each award is reduced proportionately.

Using the credit

  • Apply the awarded credit to business profits tax first. The unused portion may then offset business enterprise tax; the taxpayer cannot choose either tax first.
  • No general refundable or saleable-credit entitlement is established. A refund of estimated tax overpaid after application of a credit is a refund of tax payments, not refundability of unused credit.
  • A calendar-year taxpayer may use an award based on 2026 research in the next five taxable periods: 2027 through 2031. Track the statutory window and remaining balance.

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