Idaho R&D Tax Credit
Supports Idaho entrepreneurs with innovation tax relief for qualifying in-state innovation activities.
Eligibility · United States · US-ID
The Idaho R&D Tax Credit (Credit for Idaho Research Activities) is a state income tax credit authorized under Idaho Code §63-3029G and administered by the Idaho State Tax Commission. The credit is calculated at 5% of the excess of a taxpayer's qualified research expenses (QREs) incurred in Idaho over the taxpayer's Idaho base amount, using a base-amount methodology that mirrors the federal IRC §41 framework. QREs must be incurred within Idaho and cover wages of research personnel, supplies consumed in research, and 65% of contract research costs performed in the state.
The credit is nonrefundable and carries forward up to 14 years, providing meaningful value even to companies with limited current-year Idaho tax liability. Section 41 conformity governs what constitutes qualified research: activities that are technological in nature, follow a process of experimentation, and aim at developing new or improved products, processes, or software. The credit flows through partnerships, S corporations, and affiliated business entities, making it accessible to pass-through structures common among smaller technology companies. There is no competitive application or annual allocation cap — eligibility is determined at filing by attaching Idaho Form 67 to the annual income tax return.
For-profit businesses, universities, and qualifying research organizations operating with Idaho QREs are eligible; nonprofits and sole individuals are not. The program covers the full TRL spectrum from early applied research (TRL 3) through commercial-scale development (TRL 9) across all technology sectors, making it broadly applicable to deeptech, life sciences, software, and manufacturing R&D companies with Idaho operations. Applicants should maintain contemporaneous documentation consistent with federal §41 substantiation requirements, as the Idaho State Tax Commission may audit claims.
Nonrefundable Idaho income tax credit equal to 5% of qualifying research expenses incurred in Idaho above the base amount, with a 14-year carryforward, available to businesses across all technology sectors.
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