Key figures
New Hampshire advisory
2026, with sources
A capped, wage-based R&D credit
New Hampshire’s research and development credit is narrow by design. It covers only wages paid to employees for services in New Hampshire that count as qualified research wages under § 41 and are directed at a new or improved manufacturing process or business component; it is 10% of the excess of those wages over the federal base amount (which may be zero), capped per taxpayer at $50,000, rising to $100,000 from January 1, 2027. All taxpayers share a pool of $7 million a year, rising to $10 million from 2028, and a unitary group counts as one taxpayer.
The process is an application, filed by June 30 after the year the research occurred, with the DRA setting final awards by September 30. Credits must be used within the next five tax years. For a Portsmouth startup with $600,000 of qualifying incremental research wages, the credit is $50,000 at most, if the pool isn’t oversubscribed.
Where founders go wrong in New Hampshire
The usual case is a Massachusetts company with an engineer who lives in Nashua. If the engineer works from home in New Hampshire, there’s no New Hampshire wage withholding, but the company likely has a New Hampshire business tax filing and must register for New Hampshire unemployment insurance.
- Assuming no income tax means no business tax: the BPT and BET both apply.
- Missing the BET on a loss year because the company has no profit.
- Assuming new federal deductions apply: New Hampshire conforms to the Code as of December 31, 2018.
- Hiring in New Hampshire and assuming Massachusetts payroll rules follow the employee.
- Missing the April 1 annual report and paying the $50 late fee.
The federal baseline
This page covers what New Hampshire adds. The federal rules underneath it apply here too.
Common questions
Can a software startup claim New Hampshire’s R&D credit?
Possibly, if it qualifies. The credit is 10% of the excess of qualified manufacturing research and development wages paid for work in New Hampshire over the federal § 41 base amount, capped at $50,000 per taxpayer ($100,000 from 2027) and drawn from a statewide pool of $7 million a year. You apply by June 30 after the research year, and the DRA sets final awards by September 30.
Is New Hampshire tax-free for a startup?
For employees who live and work there, there’s no state income tax on wages. For the company, the business enterprise tax on payroll and the 7.5% business profits tax replace an income tax; they don’t disappear.
Advisory next door
- MAMassachusetts advisoryMassachusetts offers a research credit with a long carryover, a 4% surtax on income over $1,107,750 that a share sale can trigger, and a strict ABC test for contractors.
- MEMaine advisoryMaine’s research credit is 5% of incremental Maine research plus 7.5% of basic research payments, carried 15 years. Investors can earn a seed capital credit through FAME.
- VTVermont advisoryVermont’s R&D credit is 27% of the federal credit for Vermont work, carried forward 10 years, and the state publishes who claims it. Three recent rule changes trip up older advice.
Founder guides on this
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
More of the New Hampshire guide
- AccountingAccounting and state tax in New HampshireCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in New HampshireSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in New HampshirePaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in New HampshireWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in New HampshireRegistering to do business, annual reports, franchise tax and the filing calendar
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.