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Tips To Claim the New Hampshire R&D Tax Credit Before the Deadline

Article

May 1, 2026

For New Hampshire manufacturers, the permanent restoration of immediate expensing of domestic research and experimental (R&E) expenditures under newly enacted Section 174A creates an urgent, overlapping opportunity to pair the renewed federal research and development (R&D) tax credit with New Hampshire's state-level credit before the program's June 30 deadline.

While these tax shifts create new ways to claim benefits, New Hampshire's program operates on a strict annual cycle with a $7 million statewide pool distributed proportionally if oversubscribed. Missing the application window means waiting a full year to claim benefits already earned.

The Federal Reset and the New Hampshire Conformity Gap

Enacted with the July 2025 passage of P.L. 119-21, commonly referred to as the “One Big Beautiful Bill Act,” the new IRC Section 174A, effective for tax years beginning after December 31, 2024, allows businesses to once again fully deduct domestic R&E expenditures in the year incurred. Foreign R&E costs continue to be amortized over 15 years, creating a clear policy preference for keeping research activity in the U.S.

P.L. 119-21 also provides catch-up relief. All taxpayers may elect to accelerate remaining unamortized 2022 – 2024 balances either fully in 2025 or split over 2025 and 2026. Eligible small businesses (average gross receipts of $31 million or less) may amend 2022 – 2023 returns to fully expense prior-year costs. The deadline is July 6, 2026. Section 280C coordination is essential, and Rev. Proc. 2025-28 governs the filing mechanics.

Critical Planning Point

As of December 31, 2018, New Hampshire's tax code is tied to the Internal Revenue Code (IRC). The state has not adopted Section 174A, meaning a New Hampshire manufacturer may fully deduct R&E wages federally in 2025 while still being required to amortize those same costs for Business Profits Tax (BPT) and Business Enterprise Tax (BET) purposes. The state R&D tax credit is New Hampshire's standalone mechanism to reward research investment, and the federal cleanup of Section 174 amplifies, rather than reduces, its strategic importance.

Key P.L. 119-21 Deadlines and Elections
Immediate Section 174A expensing for tax years beginning January 1, 2025
All taxpayers: Deduct unamortized 2022 – 2024 balances in 2025, or split 50/50 over 2025 – 2026
Small businesses (<$31M): Retroactively amend 2022 – 2023 returns by July 6, 2026
Section 280C coordination required for any taxpayer claiming the R&D tax credit

How R&D Credits Work in New Hampshire

Enacted in 2007 under New Hampshire Revised Statutes (RSA) Section77A: 5, XIII, the state-level tax credit is administered by the New Hampshire Department of Revenue Administration (DRA) and applies against the BPT and BET. It is available to C corps, S corps, partnerships and LLCs, with unitary or combined groups treated as a single taxpayer.

The tax credit equals 10% of qualifying manufacturing R&D wages paid to New Hampshire employees that exceed the Section 41 base amount, capped at $50,000 per taxpayer per year, with a $7 million statewide annual pool and a five-year carryforward. Eligibility uses the federal Section 41 four-part test permitted purpose, technical uncertainty, process of experimentation and a hard-science basis.

The defining distinction: only wages qualify. Unlike the federal credit and most state counterparts, New Hampshire excludes supplies, contract research, prototype materials and cloud computing costs. Eligible wages must be reported on Federal Form 6765, Line 5 or 24, and must be earned for services performed in New Hampshire.

Who Should Apply

The wage-only, manufacturing-focused structure makes the credit especially valuable for industries that anchor New Hampshire's economy, such as:

Precision manufacturing and defense subcontractors, including engineers and machinists developing new production techniques, computer numerical controlled (CNC) programming, or product configurations for aerospace and defense applications
Medical devices and life sciences, as design verification, process validation and prototype development typically generate substantial qualifying wages
Food and beverage and agricultural processing, or businesses that work on new formulations, processing techniques, packaging technologies and food-safety improvements
Electronics, automation and robotics, including embedded systems design, custom automation protocols and proprietary circuit development
Software-embedded manufacturing companies that work on developments integral to physical products or manufacturing processes (IoT devices, programmable machinery)

How the New Hampshire R&D Tax Credit Compares to Neighboring States

State	Credit Rate	Eligible Costs	Cap / Carryforward	Refundable
New Hampshire	10% of qualifying wages	Manufacturing R&D wages only	$50K cap / $7M pool / Five-year carryforward	No
Massachusetts	10% QREs; 15% basic research	Broad Section 41 base	75% excise limit / 15-year carryforward	No
Connecticut	20% incremental or 6% non-incremental	C corps only	15-year carryforward	Partial
Vermont	27% of federal credit	Follows Section 41	10-year carryforward	No
Pennsylvania	10% (20% small business)	Broad Section 41 base	$55M pool / saleable	Saleable

Application Process

The credit is not claimed on a tax return. It requires a separate, standalone application to the Department of Revenue Administration (DRA) with strict procedural requirements:

Form DP-165 with Federal Form 6765 attached (pro-forma acceptable if federal return is on extension)
Postmarked by June 30 following the tax year (no extensions or cure periods)
DRA confirms receipt by July 31; award determinations issued by September 30
Official R&D award letter must be attached to the business tax return to claim the credit

Apply Now Before the Window Closes

For 2025 qualifying activity, the New Hampshire application must be postmarked by June 30, 2026. P.L. 119-21 retroactive relief elections for eligible small businesses must be completed by July 6, 2026. These deadlines are converging.

How Cherry Bekaert Can Guide You Forward

Capturing the New Hampshire credit requires a practiced methodology for identifying qualifying activities, allocating employee time defensibly, and coordinating state documentation with federal Form 6765 and the post-P.L. 119-21 Section 174A/280C framework. Cherry Bekaert’s Tax Credits & Incentives Advisory team is comprised of diverse professionals with unparalleled knowledge in tax credits and deductions, so you can be confident in claiming your benefits.

R&D Practice With Manufacturing Knowledge

We focus specifically on R&D tax credits across manufacturing, defense, life sciences and technology. Our activity-time-analysis methodology has supported credits totaling hundreds of thousands of dollars for industrial manufacturers, with documentation that holds up to Internal Revenue Service (IRS) and state scrutiny.

Post-tax Reform Fluency

Our professionals have been at the forefront of advising clients on the interaction between Section 174A expensing, Section 280C and state non-conformity. We help clients model retroactive relief, accelerated deductions, estimated tax adjustments and amended return strategies under Rev. Proc. 2025-28.

New Hampshire-specific Knowledge

We treat New Hampshire as a discrete planning opportunity, not an afterthought to a federal study. Our team understands the static-conformity posture, the manufacturing wage-only structure, and the procedural requirements of the DRA application, including the nuances of pro-forma Form 6765 preparation when federal returns are on extension.

Complimentary Scoping

Before any commitment is made, Cherry Bekaert provides a complimentary scoping engagement to estimate qualifying wages and project credit value, with a transparent summary of expected federal and state benefits alongside proposed fees.

Contact our Tax Credits & Incentives Advisory team to schedule your complimentary R&D credit scoping or speak directly with your Cherry Bekaert engagement team.

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