R&D Binder

Short answer. You can claim both. Rhode Island runs its own credit at one of the highest state rates in the country, 22.5 percent on the first $111,111 of your Rhode Island research over a base and 16.9 percent above, separate from the federal Section 41 credit. The credit is nonrefundable and limited to half your tax each year, and its carryforward increased from 7 to 15 years starting in 2026.

Key facts

Claim both?Yes, on the same Rhode Island research
Federal rate20% regular / 14% ASC
Rhode Island rate22.5% on the first $111,111 over a base, 16.9% above
Rhode Island refundable?No (limited to 50% of tax per year)
FormsForm 6765 (federal) + Form RI-7695E (Rhode Island)

Two credits on the same research

Rhode Island computes its own credit on Rhode Island expenses; the federal credit runs on your nationwide expenses.

The federal Section 41 credit is claimed on Form 6765 with your federal return. Rhode Island's credit is claimed on Form RI-7695E with the state return, and the same research performed in Rhode Island can support both in the same year.

Rhode Island uses the federal Section 41 definition of qualified research but applies its own high rates to the Rhode Island portion, so the federal work is the basis for the state claim.

Federal Section 41 vs. Rhode Island, factor by factor

Rhode Island pairs an unusually high rate with a 50 percent annual usage limit.

FactorFederal Section 41Rhode Island
What it isCredit for increasing research activitiesRhode Island research and development expenses credit
Credit rate20% regular / 14% ASC22.5% on the first $111,111 of research over a base, 16.9% above
RefundableNo - a QSB may offset up to $500,000 of payroll tax under Section 41(h)No, and limited to 50% of tax due each year
Carryforward20 years, with a 1-year carryback15 years for 2026 credits (7 years through 2025), no carryback
Where research must occurUnited StatesRhode Island only
How you claim itForm 6765 with the federal returnForm RI-7695E with the Rhode Island return
Claim alongside the other?Yes, on the same underlying QREYes, on the same underlying QRE
DocumentationFour-part test and QRE substantiation (Treas. Reg. 1.41-4)Uses the Section 41 definition, Rhode Island research only

Where Rhode Island differs from federal

Two features set Rhode Island apart from the federal credit.

An unusually high rate, with a yearly limit. Rhode Island's 22.5 percent first-tier rate is among the highest state research rates in the country, well above the federal 20 percent, with 16.9 percent above the first tier. The catch is that the credit can offset at most 50 percent of your Rhode Island tax in any year and is not refundable.

A longer carryforward starting in 2026. For credits earned in tax years beginning in 2026, the carryforward increased from 7 to 15 years. Only research conducted in Rhode Island counts.

One evidence base for both

The records that prove the federal claim are what Rhode Island relies on too.

Because Rhode Island uses the Section 41 definition of qualified research, the four-part test analysis and the wage, contractor, and supply records that substantiate your federal credit under Treas. Reg. 1.41-4 support the Rhode Island claim, limited to the in-state share. You build the evidence once.

R&D Binder documents the federal Section 41 four-part test that both credits stand on, with Rhode Island handled as a state add-on from the same evidence. Whether your facts qualify, and which credits to claim, is a determination for your CPA.

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.

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.

Estimate your credit See the sample binder