Rhode Island Code of Regulations
Title 280 - Department of Revenue
Chapter 20 - Division of Taxation
Subchapter 20 - TAX CREDITS/DEDUCTIONS
Part 2 - Research and Development Expenses Credit (280-RICR-20-20-2)
Section 280-RICR-20-20-2.5 - Limitation and Order of Credits

Universal Citation: 280 RI Code of Rules 20 20 2.5

Current through September 18, 2024

A. For purposes of determining the order in which carry-overs shall be taken into consideration, the credit allowed by R.I. Gen. Laws § 44-32-2 (credit for research and development property) shall be used before the credit described in this regulation. The investment tax credit allowed by R.I. Gen. Laws § 44-31-1 shall be used before the credit described in this regulation.

B. The credit is limited to one-half the tax otherwise payable after all other credits available to the taxpayer have been used.

1. Taxpayer F has RI tax of $50,000, Enterprise Zone Business Credit of $15,000, Investment credit [10% type] of $20,000 and R & D credit of $10,000. The 10% type investment credit also carries the one-half tax limit [see R.I. Gen. Laws §44-30-31-1(d)] but the R & D expense credit law specifically provides that, in the ordering of the credits, any investment credit will be used before this credit. In the ordering of credit, Taxpayer F calculates:

Tax

$50,000

Enterprise Zone Credit

15,000

Tax Payable

35,000

10% Investment Credit Limit (1/2 Tax Payable)

17,500

R & D Expense Credit Limit (1/2 Tax Payable

8,750

Tax

$8,750
a. Both the remaining $2,500 of 10% investment credit and $1,250 of R & D Expense Credit can be carried forward but continue to be subject to the same order and one-half limitation

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