Short answer. Idaho's research credit is 5 percent of the increase in your Idaho research spending over a base, plus 5 percent of basic research payments. It is non-refundable, but it has one of the longest carryforwards of any state at 14 years. Since 2025, amounts deducted or amortized under Section 174 or 174A do not qualify.
Key facts
| Rate | 5% of the increase in Idaho QRE |
|---|---|
| Basic research | Plus 5% of basic research payments |
| Refundable | No |
| Carryforward | 14 years (one of the longest) |
| Section 174/174A amounts | Not eligible, from 2025 (HB 559) |
| Method | Regular incremental only; no ASC |
| Statute / form | Idaho Code 63-3029G; Form 67 |
5 percent on the increase
Idaho's credit is incremental and follows the federal method.
The credit is 5 percent of the excess of your qualified research expenses for research conducted in Idaho over a base amount, plus 5 percent of basic research payments under federal Section 41(e) for basic research conducted in Idaho. The base is computed under the federal Section 41 regular method, so the credit rewards growth in research over your historical level. Idaho does not allow the Alternative Simplified Credit.
Only Idaho counts. All research activities, expenses, and gross receipts used in the calculation must be sourced to Idaho, even where the federal definition would include work done elsewhere. The qualified expense definition otherwise follows Section 41, with one exception: under HB 559, signed February 10, 2026 and retroactive to January 1, 2025, amounts deducted or amortized under IRC Section 174 or 174A are not eligible. The 2025 Form 67 instructions say that to claim the credit, you add back the federal research and experimental deduction on the Idaho return.
Non-refundable, but a 14-year carryforward
The rate offsets Idaho tax, and the long carryforward is the point.
The credit is not refundable: it reduces Idaho income tax rather than paying cash. What sets it apart is the carryforward, up to 14 taxable years, among the longest of any state credit. A pre-profit company has well over a decade to use the credit once it turns profitable, instead of losing it.
How it is claimed
One form, filed with the return.
The credit is claimed on Idaho Form 67, Credit for Idaho Research Activities, filed with the Idaho income tax return under Idaho Code section 63-3029G, and the credit carries to Form 44. Because the Idaho credit rests on the federal Section 41 definition, the research that supports your federal claim supports the Idaho credit, limited to the Idaho-performed portion.
More on Idaho's R&D credit
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.
- Idaho Code 63-3029G (credit for Idaho research activities) - Idaho Legislature
- Idaho HB 559 (2026 Idaho Session Laws ch. 1), amending Idaho Code 63-3029G(5) - Idaho Legislature
- Idaho Form 67, Credit for Idaho Research Activities (2025) - Idaho State Tax Commission
- RSM US, Idaho conforms to One Big Beautiful Bill (February 2026) - RSM US
- 26 U.S.C. ยง 41 (credit for increasing research activities) - Cornell Law School, Legal Information Institute
- IRS, About Form 6765 - Internal Revenue Service
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder and the Idaho state workpaper from one engagement, both built to survive an exam.