The Idaho R&D tax credit, explained
Idaho offers a nonrefundable R&D credit worth 5% of qualified spend above a base amount, with a 14-year carryforward.
Last verified July 2026 against Idaho State Tax Commission guidance.
The short answer
Yes, Idaho has a state R&D tax credit. It equals 5% of qualified research expenses conducted in Idaho that exceed a base amount, calculated using the same core rules as the federal research credit under IRC Section 41, but limited to Idaho activity.
How the Idaho credit works
The credit is nonrefundable, meaning it can reduce Idaho income tax owed down to zero but will not generate a cash refund on its own.
Unused credit carries forward for up to 14 years, which gives an early-stage company time to grow into enough Idaho tax liability to use it.
How it stacks with the federal credit
Idaho's credit stacks directly with the federal R&D credit, since both use similar definitions of qualified research, just applied at different rates and to different tax bills.
The federal credit is typically worth 6% to 10% of qualified spend, and a startup under $5 million in revenue can apply up to $500,000 of it against payroll taxes each year, which matters most for a company that is not yet paying much Idaho income tax.
Example: a 4-person Idaho team with $340,000 in qualified salaries could see a federal credit of roughly $24,000 to $34,000. The same spending above the company's Idaho base amount could add a state credit worth 5% of the excess, commonly $5,000 to $10,000, which sits ready to use as the company's Idaho tax bill grows.
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Eligibility and how to claim it
Idaho's credit is open to any business with qualified research expenses tied to work performed in Idaho, using the federal definition of qualified research as a starting point.
Companies claim it on Form 67, Credit for Idaho Research Activities, filed with the Idaho corporate or individual income tax return. Idaho also lets a company elect to be treated as a startup for base amount purposes, even if it would not qualify as a startup under federal rules, and that choice is permanent once made.
The Idaho State Tax Commission administers the credit. The company's CPA prepares Form 67 and files it with the state return, using the same research documentation that supports the federal Form 6765.
Official source: Idaho State Tax Commission.
Carryforward and deadlines
Unused Idaho R&D credit carries forward for 14 years, longer than many states allow, which helps a young company that is not yet profitable in Idaho.
There is no separate state application. The credit is calculated and claimed directly on the Idaho income tax return each year, on the same deadline as the return itself.