Minnesota Credit for Increasing Research Activities

Program Overview

Minnesota provides a credit based on the increase in qualified research expenses for research conducted in Minnesota, with a higher rate applying to the first tranche of qualifying expenses. The credit is generally non-refundable for C corporations, while a portion may be refundable to eligible individual partners and shareholders of pass-through entities, subject to applicable requirements. Minnesota generally follows federal Section 41 definitions for qualified research activities and expenses.

Eligibility

• Corporations with qualified research expenses associated with research conducted in Minnesota may qualify.
• Partnerships and S corporations with qualifying research expenses may qualify, subject to applicable requirements.
• Individual partners and shareholders may be eligible for the refundable portion of the credit when the applicable requirements are met.

Benefits

• Two-tier credit rates apply based on the amount of qualifying research expenses.
• The credit is non-refundable for C corporations.
• A portion of the credit may be refundable to eligible individual partners and shareholders of pass-through entities, subject to applicable requirements.