The Rhode Island R&D tax credit, explained
Yes, Rhode Island offers a two-tier R&D credit of 22.5% and 16.9% of qualified research expenses above a base amount.
Last verified July 2026 against Rhode Island Division of Taxation guidance.
The short answer
Does Rhode Island have an R&D tax credit? Yes. The Research and Development Expenses Credit uses a two-tier rate on qualified research expenses above a base amount calculated the same way the federal credit calculates it.
How the Rhode Island credit works
The rate is 22.5% on the first $111,111 of excess qualified research expenses, and 16.9% on any excess above that. The credit is nonrefundable and cannot reduce a company's tax below Rhode Island's statutory minimum corporate tax.
Rhode Island recently extended how long unused credit can be carried forward, from 7 years to 15 years, starting with credits earned in tax year 2026. That gives early-stage companies with light tax liability more time to use the credit as they grow.
How it stacks with the federal credit
Rhode Island's credit stacks with the federal R&D credit, which runs roughly 6% to 10% of qualified research spend. For startups under $5 million in revenue, up to $500,000 of the federal credit each year can offset payroll taxes instead of income tax, which matters most in years before the company owes much state tax.
Example: a Providence medical device startup with 14 employees and $1.6 million in qualified research expenses, exceeding its base amount by $1.4 million, would generate a Rhode Island credit of about $242,000 (22.5% on the first $111,111, 16.9% on the rest). At a 7% effective federal rate on the same spend, the federal credit would add roughly $112,000, most of it usable against payroll tax if the company qualifies as a startup.
Because Rhode Island's credit is nonrefundable, a young company with little state tax liability may carry most of it forward. The federal credit's payroll offset is often the more immediate cash benefit for a pre-revenue or early-revenue Rhode Island startup, with the state credit growing in value as the company scales toward profitability.
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Eligibility and how to claim it
Any company doing qualified research in Rhode Island, using the same federal definition of qualified research under Section 41, can claim the credit. It applies against Rhode Island corporate income tax.
The credit is claimed on Form RI-7695E, attached to Schedule B-CR (the state's business entity credit schedule), filed with the Rhode Island corporate tax return. The Rhode Island Division of Taxation administers the credit.
As with the federal credit, Claimship prepares the underlying research study and expense documentation. The company's CPA files the Rhode Island return and claims the credit there.
Official source: Rhode Island Division of Taxation.
Carryforward and deadlines
Unused credit earned in tax years starting in 2026 carries forward up to 15 years. Credit earned in earlier years kept the older 7-year carryforward for amounts allowed through tax years ending on or before December 31, 2025.
The credit is claimed with the annual corporate tax return, on the normal Rhode Island filing schedule. There is no separate application window or pre-certification step for the R&D expenses credit itself.