Domestic Research and Experimental Expenditure Expensing

Addition

Minnesota requires C corporations make an addition for 80% of the federally claimed domestic R&E expense that has been immediately expensed. 

Subtraction

C corporations are allowed a subtraction for one-fourth of the addition amount over the subsequent four taxable years. 

Addition

Minnesota requires C corporations also add back the amount of any deduction claimed for unamortized amounts. 

This addition impacts tax years 2025 and 2026 only.

Subtraction

C corporations are allowed a subtraction for the unamortized addition on the same amortization schedule amount that would have been allowed if the election was not made.

If a C corporation converts to an S corporation after making addbacks for domestic R&E expensing, the S corporation is not allowed any remaining subtractions.