Section 280-RICR-20-20-2.5 - Limitation and Order of CreditsA. For purposes of determining the order in which carry-overs shall be taken into consideration, the credit allowed by R.I. Gen. Laws § 44-32-2 (credit for research and development property) shall be used before the credit described in this regulation. The investment tax credit allowed by R.I. Gen. Laws § 44-31-1 shall be used before the credit described in this regulation.B. The credit is limited to one-half the tax otherwise payable after all other credits available to the taxpayer have been used.1. Taxpayer F has RI tax of $50,000, Enterprise Zone Business Credit of $15,000, Investment credit [10% type] of $20,000 and R & D credit of $10,000. The 10% type investment credit also carries the one-half tax limit [see R.I. Gen. Laws §44-30-31-1(d)] but the R & D expense credit law specifically provides that, in the ordering of the credits, any investment credit will be used before this credit. In the ordering of credit, Taxpayer F calculates: Tax | $50,000 |
Enterprise Zone Credit | 15,000 |
Tax Payable | 35,000 |
10% Investment Credit Limit (1/2 Tax Payable) | 17,500 |
R & D Expense Credit Limit (1/2 Tax Payable | 8,750 |
Tax | $8,750 |
a. Both the remaining $2,500 of 10% investment credit and $1,250 of R & D Expense Credit can be carried forward but continue to be subject to the same order and one-half limitation280 R.I. Code R. § 280-RICR-20-20-2.5