Q&A with the Pennsylvania Department of Revenue

With the due date of the federal returns changing for many corporations to Oct. 15, does the Department intend to change the due date of the R&D credit application to Oct. 15?

Dec 13, 2016
No, the deadline is a statutory.

§ 8703-B (a)

Credit for Research and Development Expenses.--(a) A taxpayer who incurs Pennsylvania qualified research and development expense in a taxable year may apply for a research and development tax credit as provided in this article. By September 15, a taxpayer must submit an application to the department for Pennsylvania qualified research and
development expense incurred in the taxable year that ended in the prior calendar year.

If the statute is changed to allow for the 10/15 filing deadline via amendment – DOR would need the extra month to process the credit to 1/15 of following year.  This would trigger an issue in selling the credits and credit utilizations which effectively make the credit useless for the filing period, as the award would be in another calendar year.  The applicants would lose a year which more or less brings back the one year holding period, but is worse because they could not use it on the prior year return for awardees.

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These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.