Short answer. Idaho lets an unused research credit carry forward for 14 years. The credit is nonrefundable, so for a company that owes little or no Idaho tax, that 14-year window is how the credit gets used. Starting with 2025, expenses deducted or amortized under IRC 174 or 174A do not count, and you add the federal R&E deduction back on the Idaho return to claim the credit.
Key facts
| Carryforward | 14 years |
|---|---|
| Refundable | No |
| Rate | 5% of the increase in Idaho QRE over a base, plus 5% of basic research payments |
| Section 174/174A amounts | Not eligible from 2025; federal R&E deduction added back (HB 559) |
| Forms | Form 67, carried to Form 44 |
| Statute | Idaho Code 63-3029G |
How the carryforward works
The credit is nonrefundable, so the unused part waits for future tax.
Idaho's credit is 5 percent of the increase in Idaho qualified research expenses over a base, plus 5 percent of basic research payments for corporations. It uses the regular incremental method only. You compute it on Form 67 and carry it to Form 44. When the credit is larger than your Idaho tax, the excess carries forward for up to 14 years.
There is no refund, exchange, or sale option. If the credit does not offset Idaho tax within 14 years, it expires, so the only lever is time.
The 2025 change that affects what you carry
HB 559 changed which expenses can build the credit, retroactive to January 1, 2025.
Under HB 559, amounts deducted or amortized under IRC 174 or 174A are not eligible for the Idaho credit. To claim the credit, you add the federal R&E deduction back on the Idaho return, as the 2025 Form 67 instructions describe. The trade-off is that you give up the deduction on the Idaho return to earn the credit.
For a company that carries credit forward, this matters twice. It affects how much credit each year produces, and the add-back raises Idaho taxable income, which can change how soon you have tax for the carryforward to offset.
An illustrative example
Round numbers, chosen for the arithmetic, not taken from any real company.
A pre-profit SaaS company earns $15,000 of Idaho credit in each of 2025, 2026, and 2027 and owes no Idaho tax, so it carries $45,000 forward. It owes $20,000 of Idaho tax in 2028 and $30,000 in 2029. Ignoring new credit earned in those years, it uses $20,000 in 2028 (leaving $25,000) and the remaining $25,000 in 2029, when it still owes $5,000. All of it is used long before any 14-year window closes.
Records that hold up when the credit is used
A credit earned in 2025 can be used as late as the late 2030s.
When the credit finally reduces your tax, the support for it has to be as solid as it was the year you earned it. R&D Binder produces the federal Section 41 documentation the Idaho credit rests on: the business components, the four-part test analysis, and the qualified research expense workpaper, built from your commit history and payroll. Your CPA files Form 67, and whether your facts qualify is the CPA's call.
More on Idaho's R&D credit
The full state overview, the federal Section 41 work it builds on, and related state guides:
Sources
Every claim on this page traces to a primary authority. Each source below is independent and verifiable.
- Idaho Code 63-3029G (credit for Idaho research activities) - Idaho Legislature
- Idaho HB 559 (2026 Idaho Session Laws ch. 1), amending Idaho Code 63-3029G(5) - Idaho Legislature
- Idaho Form 67, Credit for Idaho Research Activities (2025) - Idaho State Tax Commission
- RSM US, Idaho conforms to One Big Beautiful Bill (February 2026) - RSM US
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder and the Idaho state workpaper from one engagement, both built to survive an exam.