Short answer. Rhode Island is 22.5 percent on the first $111,111 of qualifying research over a base, about $25,000 of credit, and 16.9 percent above that. It is non-refundable, can cover at most half your tax in a year, and carries forward 7 years.
Key facts
| Rate (first $111,111 over base) | 22.5% (about $25,000 of credit) |
|---|---|
| Rate (above $111,111) | 16.9% |
| Refundable | No (max 50% of tax per year) |
| Carryforward | 7 years |
| Statute | R.I. Gen. Laws 44-32-3 |
22.5 percent, then 16.9 percent
Rhode Island's rate is tiered, and the first tier is unusually high.
The credit is 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 first tier caps the high-rate portion at about $25,000 of credit. It is incremental: only research spending above a base computed under the federal Section 41 method earns credit.
Only research conducted in Rhode Island counts. The qualified expense definition otherwise follows federal Section 41.
A 50 percent annual ceiling
How much of the credit you can use in any one year is limited.
The credit cannot reduce your Rhode Island tax for the year by more than one-half, after other credits. A large credit is therefore used over several years rather than all at once. The rate is generous, but the ceiling shapes how quickly you realize it.
Non-refundable, 7-year carryforward
What you cannot use this year banks for later.
The credit is not refundable, but unused credit carries forward up to 7 years. A pre-profit company carries the whole amount forward; a profitable one absorbs it over time against the 50 percent annual ceiling. The credit sits at R.I. Gen. Laws 44-32-3.
More on Rhode Island'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.
- Rhode Island General Laws 44-32-3 (research and development expenses credit) - Rhode Island General Assembly
- Rhode Island Research and Development Expenses Credit regulation (280-RICR-20-20-2) - Rhode Island Department of State
- 26 U.S.C. ยง 41 (credit for increasing research activities) - Cornell Law School, Legal Information Institute
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder and the Rhode Island state workpaper from one engagement, both built to survive an exam.