How to Apply

​Below is a list of information needed for the R&D tax credit application:

• Entity Type (Individual or Business)
• Entity ID Number
• Entity Name
• Business Address
• Phone Number
• ​Federal Form 6765 (If filed with the IRS)
• R&D Expenditures by Location
• PA Employer Withholding ID number if you have direct wages.
• Information on any subcontractors employed in the R&D activity.
• Ownership Information (Name, Address, SSN, Ownership %)
• Officer Information (Name, Address, SSN)

Federal Form 6765

The following information must be provided. It can be obtained via information on Federal Form 6765.

• ​Wages for Qualified Service
• Cost of Supplies
• Rental or Lease Costs of Computers
• Applicable Percentage of Contract Research Expenses

If you don’t complete Form 6765 you still need to provide the information requested.

R&D Expenditures by Location

The following information must be provided for each Pennsylvania-based project being used to apply for the R&D tax credit. Only include information for years in which the entity had actual qualified R&D expenditures.

• Project Name
• Address
• Direct Wages Paid
• Subcontracted Labor and Supplies
• Supplies and/or Computer Rental Costs
• PA Expenditures Located in a KOZ
• Project Description (see below)

TIP: If you receive the error message:

This should be equivalent to Total Qualified Research Expenses on Federal Form 6765.

Check that the Project Expenditure and Non-PA Expenditures amounts are correct. Check the amounts on the prior page where information was entered for Federal Form 6765. (PA Project Expenditures + Non-PA Expenditures = Total Qualified Research Expenses [FF6765])

Project Description

Elimination of Uncertainty
Describe in detail how you have attempted to eliminate uncertainty about the development of a product or process improvement.

Process of Experimentation
Describe in detail how you have evaluated alternatives for achieving your desired result. Describe in detail your method of experimentation including modeling, simulation, systemic trial and error, or other methods.

Technological in Nature
Describe in detail your process of experimentation and how it relies on engineering, physics, chemistry, biology, or computer science.

Qualified Purpose Information
Describe in detail what new or improved product or process you created. Describe in detail the resulting increased performance, function, reliability, or quality.

Direct Wages

Definition: Monetary amounts paid to its employees for R&D-related work.

If you indicated you have direct wages, the following information will be required to specify the entity for which direct wages are reported and paid:

• PA Employer Withholding ID number
• Federal Employer Identification Number (FEIN)

HINT: If your application will not let you progress forward, double-check that you entered the PA Employer Withholding Account ID number and FEIN/SSN correctly. Once you are sure everything is correct and you still cannot proceed, please save the application, and contact the Department of Revenue (see Assistance).

Third-Party/Subcontractor Labor Costs

Definition: Monetary amounts paid by the applicant to Third-Party/Subcontractors for R&D-related work.

If you answered YES to having subcontractors, you MUST provide the following for each entity:

• Subcontractor/Employer Name
• FEIN
• Did applicant issue 1099-Misc/W-2
• Amount paid
• Phone Number

If this information is not provided, your application may be rejected or experience processing delays.

TIP: The total amount should be equal to the amount provided under the third-party/subcontractor labor and supplies line that you entered in the R&D Expenditures by Location section.

Reminder: The department only needs a record of who was paid. Example: If three companies employed 100 subcontractors and the checks were made to the three companies, then the department only needs the information for the three companies that were paid. However, if the 100 subcontractors were independently paid, the department requires their information to be entered into the online system.

Prior Years’ Expenditures

The following information must be provided for each Pennsylvania-based project being used to apply for the R&D tax credit. You must enter tax years from oldest to most recent and include at least one and no more than 4 prior expenditures:

• Project Name
• Address
• Direct Wages Paid
• Subcontracted Labor and Supplies
• Supplies and/or Computer Rental Costs
• PA Expenditures Located in a KOZ
• Project Description (see Project Descriptions)

Ownership Information

All applicants will be checked for entity and ownership compliance. All persons or businesses with a 20 percent or greater ownership in the entity must be disclosed.

• FEIN
• Business or Individual Name
• Relationship
• Address
• Ownership Percentage

Signature and Verification

To complete the application, you will need to provide the following information on an Officer of the applicant.

• Officer Name
• Title
  
• SSN/FEIN
• Phone Number
• Address​