Rhode Island's R&D credit starts at 22.5%.

Rate	22.5% (first $111,111 over base), 16.9% above
Refundable	No
Carryforward	7 years
Statute	R.I. Gen. Laws 44-32-3

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

• Rate. 22.5 percent of the first $111,111 of qualified research expenses that exceed the base amount, and 16.9 percent of the excess above $111,111. The 22.5 percent tier caps the high-rate portion at about $25,000 of credit, which is the original statutory framing.
• 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.
• Rhode Island-only. The research has to be conducted in Rhode Island. 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 Rhode Island claim, limited to the Rhode Island-performed portion.
• A 50 percent ceiling per year. The credit cannot reduce your Rhode Island tax for the year by more than one-half, after other credits. A large credit is used over several years rather than all at once.
• Nonrefundable, with carryforward. The credit offsets Rhode Island tax. It is not refundable, but unused credit carries forward for up to 7 years.

The credit is computed under R.I. Gen. Laws section 44-32-3 and claimed with the Rhode Island business tax return. A separate credit under section 44-32-2 covers tangible research and development property, which is outside the scope of the software-research workpaper.

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 Rhode Island uses the same Section 41 expense definition, that same evidence supports the Rhode Island credit for the portion of the work conducted in Rhode Island.

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

• A Rhode Island-attributable QRE breakdown: wages, supplies, and contractor expenses tied to research conducted in Rhode Island, using the same business-component partition as the federal binder.
• The base amount and the excess over base, with the credit computed at the 22.5 and 16.9 percent tiers around the $111,111 threshold.
• A usage note: the 50 percent annual ceiling and the 7-year carryforward, so your CPA can plan how the credit is absorbed over time.
• Filing notes for your CPA: which Rhode Island return and schedule the credit attaches to.

We do not file the Rhode Island 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 Providence SaaS company with 12 engineers, $2.4M in qualifying wages (the federal QRE pool), and 9 engineers conducting their research in Rhode Island.

• 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.
• Rhode Island credit. Computed on the Rhode Island-conducted portion. Allocate roughly $1.8M to Rhode Island ($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 22.5 percent of the first $111,111 (about $25,000) plus 16.9 percent of the remaining $788,889 (about $133,322), for roughly $158,000.
• Nonrefundable, used over time. The credit offsets Rhode Island tax, capped at half the year's liability, with the rest carried forward up to 7 years. A pre-profit company carries the whole amount forward; a profitable one absorbs it over several years.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus the Rhode Island 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 Rhode Island return.

If the Rhode Island Division of Taxation 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 Rhode Island. The binder R&D Binder produces is built to that standard from the federal side, and the Rhode Island 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 Rhode Island Division of Taxation examination is a separate scope at $250 per hour, scoped per incident. We do not represent before the Division; that remains your CPA's responsibility or your tax controversy attorney's.

• R.I. Gen. Laws section 44-32-3 (Credit for qualified research expenses), the 22.5 percent and 16.9 percent rate tiers, the Section 41 base, the in-state requirement, the 50 percent annual limitation, and the 7-year carryforward. Section 44-32-2 is the separate credit for research and development property. Rhode Island General Assembly.
• Rhode Island Department of State, Research and Development Expenses Credit regulation (280-RICR-20-20-2), for the 22.5 and 16.9 percent rates, the $111,111 threshold, the base computation, the 50 percent limitation, and the 7-year carryforward.
• Rhode Island Division of Taxation, economic development tax credit guidance and the business credit schedule on which the credit is claimed.
• IRS Form 6765 (federal Credit for Increasing Research Activities) and Internal Revenue Code Section 41, the federal definition Rhode Island incorporates.

This page is general informational content, not tax advice for any specific taxpayer. The Rhode Island credit is administered by the Rhode Island Division of Taxation. Rates, the threshold, the limitation, and the carryforward reflect R.I. Gen. Laws section 44-32-3 and regulation 280-RICR-20-20-2 as of June 2026. Confirm current figures and deadlines with your CPA or the Division 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