A taxpayer that has qualified North Carolina research expenses for the taxable year is allowed a credit equal to a percentage of the expenses, according to the following subdivisions. Only one credit is allowed with respect to the same expenses. If more than one subdivision applies, then the credit is equal to the higher percentage, not both percentages combined.

1. Small business – If the taxpayer was a small business as of the last day of the taxable year, the applicable percentage is three percent.
2. Low-tier research – For expenses performed in a development tier one area, the percentage is three percent.
3. Other research – For expenses not covered under subdivision 1 & 2, the percentages shown below apply to qualified North Carolina research expenses:

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