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MinnesotaCare Research Credit
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The Research Credit applies to health care providers and hospitals who use receipts received from providing patient services to fund or conduct qualifying research. The credit is directly applied against any MinnesotaCare tax owed by the health care provider or hospital, but the credit cannot exceed the total tax owed.
Note: Health care providers and hospitals may only claim the Research Credit if they do not qualify for the Health Care Research Exemption. The Health Care Research Exemption applies to health care providers, hospitals, and surgical centers who receive payments for providing patient services through a formal program of health care research. Go to MinnesotaCare Tax Exemptions for more information on the exemption. You can also find additional information on differences between the Research Credit and the Health Care Research Exemption in Revenue Notice 06-07.
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Health care providers and hospitals may be eligible to claim the Research Credit if they used receipts from providing health care services to fund or conduct qualifying research.
The business must be one of the following:
- Exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code (IRC)
- Government-owned or operated
The business conducting the research is not required to be a health care provider or hospital.
The research must be:
- Part of a formal program of medical and health care research
- Approved in writing by the governing body of the health care provider or hospital taking the credit
- Designed to improve the diagnosis and treatment of disease or injury
- Reviewed by individuals who meet all the following requirements:
- Are subject matter experts
- Are not involved in conducting the research
- Have no financial interest in the research
- Reviewed and supervised by one of the following:
- An institutional review board, if the research involves humans
- An institutional animal care and use committee, if the research involves animals
- A peer review process, if the research is in biochemistry, molecular biology, or physiology
Qualifying research does not include:
- Clinical research activities paid directly for the benefit of an individual patient
- Routine evaluations for health care methods or products conducted for the purpose of making a management decision
You must report receipts from providing health care services that you use to fund qualifying research on your annual return. The receipts must be subject to MinnesotaCare tax.
You cannot use receipts that are exempt from the tax to fund or claim the credit, including:
- Receipts exempt under Minnesota Statutes 295.53, subd. 1
- Amounts reported on exemption lines of your MinnesotaCare tax return
- Any grants, gifts, or other funds not subject to MinnesotaCare tax
The credit is equal to a percentage of the expenditures used to fund the qualifying research and cannot exceed the amount of your MinnesotaCare tax liability for the year. The percentage is determined annually. For 2023, the percentage is 0.5%.
You can file your credit electronically in our e-Services system when you file your annual MinnesotaCare tax return.
If your e-Services account is already set up for the credit, you will be asked to enter the amount of qualifying receipts subject to MinnesotaCare tax that were used to fund qualifying research during the year. Your credit will be calculated for you based on the information you enter.
If you believe you are eligible for the credit but have not claimed it in the past, please contact us so we can update your e-Services account.
