North Dakota's R&D credit is 25% on your first $100,000 of new research.

Rate	25% (first $100k of increase), 8% above
Refundable	No
Carryback	3 years
Carryforward	15 years
Statute	N.D.C.C. 57-38-30.5

The credit is the federal research credit, narrowed to North Dakota and built on the increase in your research spending. The mechanics:

• Rate. 25 percent of the first $100,000 of qualified research expenses that exceed the base amount, and 8 percent of the excess above $100,000.
• It is incremental. The credit counts only research spending above a base amount computed under the federal Section 41 method, so it rewards growth in research over your historical level.
• Carryback and carryforward. The credit is nonrefundable, but an unused amount carries back 3 tax years and forward up to 15 tax years. The carryback can recover North Dakota tax you already paid, which most state credits do not allow.
• North Dakota-only. The research has to be conducted in North Dakota. Expenses for research done elsewhere do not count, even where the federal definition would include them.
• Same expense definition as federal. Qualified research expenses follow IRC Section 41: wages for qualified services, supplies, and contract research. The work that supports your federal claim supports the North Dakota claim, limited to the in-state portion.
• Limited transfer option. A narrow set of certified small research companies (primary-sector businesses under $750,000 in gross revenue doing first-time research) may transfer up to $100,000 of unused credit. Most established SaaS companies will use the credit themselves rather than transfer it.

The credit is claimed with the North Dakota income tax return under N.D.C.C. section 57-38-30.5.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder is what supports your federal Form 6765 and, starting tax year 2026, the mandatory Form 6765 Section G appendix. Because North Dakota uses the same Section 41 expense definition, that same evidence supports the North Dakota credit for the portion of the work conducted in North Dakota.

The North Dakota state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• A North Dakota-attributable QRE breakdown: wages, supplies, and contractor expenses tied to research conducted in North Dakota, using the same business-component partition as the federal binder.
• The base amount and the excess over base, with the credit computed at the 25 and 8 percent tiers around the $100,000 threshold.
• A usage note: the 3-year carryback and 15-year carryforward, so your CPA can decide whether to recover prior-year tax or carry the credit forward.
• Filing notes for your CPA: which North Dakota return and schedule the credit attaches to.

We do not file the North Dakota return or sign it. That stays with your CPA, the same way federal Form 6765 does. R&D Binder produces the workpaper; your CPA files.

If you operate in more than one state, additional state workpapers are $995 each. Most states with an R&D credit track the federal QRE definition closely, so the marginal cost per state is low once the federal binder is complete.

A worked example. A Fargo SaaS company with 12 engineers, $2.4M in qualifying wages (the federal QRE pool), and 9 engineers conducting their research in North Dakota.

• Federal Section 41 credit. Computed on the full $2.4M federal QRE pool through Form 6765, claimed by the CPA. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• North Dakota credit. Computed on the in-state portion. Allocate roughly $1.8M to North Dakota ($2.4M times the 9/12 engineer ratio, refined by each employee's actual research location). Say the base amount is $900,000, so the excess is $900,000. The credit is 25 percent of the first $100,000 ($25,000) plus 8 percent of the remaining $800,000 ($64,000), for about $89,000.
• Nonrefundable, but with carryback. A profitable company can carry the credit back 3 years to recover tax already paid, or forward up to 15 years. A pre-profit company carries it forward. The credit is rarely lost.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus the North Dakota state workpaper add-on ($995). Total $5,990.

The base amount and the engineer allocation are specific to each company; the numbers above are illustrative. The CPA files both returns. R&D Binder never appears on the federal or North Dakota return.

If the North Dakota Office of State Tax Commissioner examines a return on which the research expense credit was claimed, the substantiation expected is the same kind the IRS expects under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, and QRE allocation by employee, contractor, and supplies, plus support that the research was conducted in North Dakota. The binder R&D Binder produces is built to that standard from the federal side, and the North Dakota workpaper inherits the same business-component structure and adds the in-state allocation.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for a North Dakota examination is a separate scope at $250 per hour, scoped per incident. We do not represent before the Office of State Tax Commissioner; that remains your CPA's responsibility or your tax controversy attorney's.

• N.D.C.C. section 57-38-30.5 (Income tax credit for research and experimental expenditures), the 25 percent and 8 percent rate tiers around the $100,000 threshold, the Section 41 base, the in-state requirement, the 3-year carryback and 15-year carryforward, and the limited transfer option for certified small research companies. North Dakota Century Code, Title 57.
• North Dakota Office of State Tax Commissioner, Research Expense Credit, for the rate tiers, the base computation, the carryback and carryforward, and the transfer rules.
• IRS Form 6765 (federal Credit for Increasing Research Activities) and Internal Revenue Code Section 41, the federal definition North Dakota incorporates.

This page is general informational content, not tax advice for any specific taxpayer. The North Dakota credit is administered by the North Dakota Office of State Tax Commissioner. The rates, the base computation, and the carryback and carryforward reflect N.D.C.C. section 57-38-30.5 and Tax Commissioner guidance as of June 2026. Confirm current figures and deadlines with your CPA or the Office before filing.

• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• California R&D credit
• Idaho R&D credit
• Illinois R&D credit
• Indiana R&D credit