State R&D Tax Credits

STATE	CREDIT NAME	STATE SPECIFIC REQUIREMENT	CREDIT RATE	NOTE	DEADLINE
Alabama	N/A			There is no state specific tax credit. You may still qualify for the federal tax credit.
Alaska	Alaska R&D Tax Credit	This credit is available to corporations and flow through entities that have QREs under RC § 41. Corporations who qualify for the federal credit qualify for the Alaska state credit	18% of federal R&D credit	QREs do not need to be conducted in Alaska to qualify but must be conducted within the U.S. Credits may be used against Alaska tax liabilities.
Arizona	Research and Development Income Tax Credit	This credit is available to corporations and flow through entities and can be claimed on R&D expenses based in Arizona. Starting in 2010, a qualifying company may be eligible to claim a partial refund	24% on the first $2.5 million qualifying expenses over the base amount and 15% on any in excess. To claim a partial refund of up to 75% of the excess credit amount a company must be		Calendar year taxpayers file on or a day after the first business day after the close of the previous calendar year. Fiscal year taxpayers file on or after the first business day after the end of the fiscal year.
Arkansas	n-House Income Research Tax Credit, In-House Research by a targeted business credit, Research and Development in an area of strategic value tax credit, University Based	These credits are available to corporations and flow through entities and can be claimed on R&D expenses based in Arkansas.	20-30% of qualifying expenses over the base amount	Arkansas offers four credits for R&D activities performed in state. Tax credit rates differ depending on work done with Arkansas colleges or universities.
California	Research and Development Tax	This credit is available to corporations and flow through entities and can be claimed on R&D activities performed in California. The California research credit follows the same definitions of research activities and qualified research expenditures as the federal tax credit	15% on qualifying expenses over the base amount + 24% of basic research payments	California uses the AIRC method rather than the ASC method. California’s definition of gross receipts: sales of real, tangible, or intangible property held for sale to customers in the ordinary course of the taxpayer’s business delivered or shipped to a purchaser in California.	Current year claims are submitted with the tax return. Entities can amend a prior year California tax return to claim R&E Credit if the applicable statue of limitations is open. Statue of limitations is generally 4 years from original due date or return, or one year from date of overpayment
Colorado	Research and Development Tax Credit for Enterprise Zones	The qualifying research activities do not have to be performed within Colorado. The entity must be in an enterprise zone and must have been operating in the same enterprise zone for 3 years.	3% on qualifying expenses over the base amount	Rolling deadline: Submit with Colorado income tax return
Connecticut	Research and Experimental Expenditures Tax Credit	This program is available to corporations and flow through entities who perform R&D in Connecticut. Taxpayers elect to use the incremental method or the non-incremental method. A qualified small business who cannot take the tax credit due to having no tax liability may exchange the tax credit with the state for a credit refund of 65% of the value of the tax credit.	20% with the incremental method, 6% with the non-incremental method (limitations apply)	Qualified small business: Gross income for the previous income year that is
Delaware	Credit for Research and Development Expenses	This program is available to corporations and flow through entities who perform R&D in Delaware. Taxpayers elect one of two methods to calculate the credit. The total credit is capped at 50% of the taxpayer’s tax due in any one taxable year.	10% of qualifying expenses over the base amount or 50% of Delaware’s appointed share of the taxpayer’s federal R&D tax credit	Small businesses with	Must submit a R&E credit application to the Division of Revenue on Form 2070AC by September 15th (after end of the taxable year for the R&D expenses to be claimed). A copy of the federal R&E form must also be submitted.
Florida	Research and Development Tax Credit	This credit is available only to C Corporations in one of the target industries outlined by the Department of Economic Opportunity in Florida.	10% of qualifying expenses over the base amount	Must claim the federal credit to claim the Florida credit. Industries outlined by the Department of Economic Opportunity: manufacturing, life sciences, information technology, aviation and aerospace, homeland security and defense, cloud information technology, marine sciences, materials science, and nanotechnology industries	Claim must be submitted between March 20th and March 27th of the same year for QREs incurred in the prior calendar year.
Georgia	Research and Development Tax Credit	This credit is available to taxpayers who have qualified research expenditures as defined by the IRC S41 in Georgia.	10% of qualifying expenses over the base amount. Limited to 50% of the company’s tax liability.		Submit with federal claim
Hawaii	Tax Credit for Research Activities	This credit is available to corporations and flow through entities that have claimed the federal research tax credit in the same tax year. The credit will can be claimed on expenses based in Hawaii.	State credit = Federal tax credit x (amount of QREs incurred in Hawaii/ amount of QREs in federal tax credit)	The credit has a combined cap for all interested entity’s of $5M per year, distributed based on a first come, first-served basis.	Online applications open on March 1st and must complete an online questionnaire due March 31st. Must submit claim by the end of the 12th month following the Fiscal Year End of when the QREs were incurred
Idaho	Credit for Idaho Research Activities	This credit is available to corporations and flow through entities with research activities taken place in Idaho. The state credit uses the same calculation methods as the federal tax credit.	5% of qualifying expenses over the base amount		Due with Idaho Tax Return
Illinois	The Illinois Research and Development Credit	This credit is available to corporations and flow through entities with research activities performed in Illinois. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code.	6.5% of qualifying expenses over the base amount	Two Options: Research Expense Credits & R&D Sales Tax Exemption	Due with Illinois Tax Return
Indiana	Indiana Research Expense Tax Credit	This credit is available to corporations and flow through entities with research activities performed in Indiana.	15% of first $1M qualifying expenses over the base amount and 10% in excess. Entities with 0 QREs in the last 3 taxable years can claim a tax credit of 5% of the entity’s Indiana QRE for the current taxable year.	There is an 100% sales tax exemption for qualified R&D equipment and property purchased	Due with Indiana Tax Return
Iowa	The Iowa Research Activities Tax Credit	This credit is available to corporations and flow through entities with qualifying activities as defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.” performed in Iowa. The credit can be calculated using the regular credit method or the simplified credit method.	6.5% of qualifying expenses over the base amount (RRC) or 4.55% of QREs for the past three years (ASC)	Fully refundable after the entity’s tax liabilities are met. Companies that receive awards from the Iowa Economic Development Authority under the Enterprise Zone Program or High-Quality Jobs Program can apply a Supplemental Research Activities Credit: additional 10% of QRE for gross revenues $20M	Due with Iowa Tax Return
Kansas	Kansas Research and Development Credit	This credit is available only to c-corporations with research activities performed in Kansas. The state credit uses the same definition of qualified research expenditures as the federal tax credit.	6.5% of qualifying expenses over the base amount		Due with Kansas Tax Return
Kentucky	Qualified Research Facility Tax Credit	This credit is available to taxpayers with qualified costs of construction of research facilities in Kentucky.	5% of the qualified costs of construction, remodeling, expanding and equipping facilities in Kentucky for qualified research	This credit may be applied against income taxes imposed by KRS 141.020 (individual income tax), KRS 141.040 (corporation income tax), or KRS 141.0401 (limited liability entity tax [“LLET”]. Construction of research facilities is defined as the constructing, remodeling, and equipping facilities in Kentucky, or expanding existing facilities to conduct qualified research.	Schedule QR is due with Kentucky Form 720 filing
Louisiana	Louisiana Research and Development Tax Credit	This credit is available to corporations and flow through entities with research activities performed in Louisiana. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code. Ineligible entities, unless specifically invited by the Secretary of LED to: Professional services firms that do not have a pending or issued US patent related to the QREs claimed; and Entities primarily engaged in custom manufacturing and custom fabricating that do not have a pending or issued US patent related to the QREs claimed.	5-30% of qualifying expenses over the base amount depending on the size of the business	This credit has 3 types of calculation methods depending on the size of the corporation. Before applying for the state credit, the taxpayer must apply for, and receive, a credit certification from the Department of Economic Development. There is an application fee of 0.5% of the credit applied for with a minimum of $500 and a maximum of $15,000.	Due with Louisiana Tax Return
Maine	Research Expense Tax Credit	This credit is available to corporations and flow through entities with R&D performed in Maine. Qualified research expenditures and base period are defined the same as in the Federal Tax Credit.	5% of qualifying expenses over the base amount + 7.5% of basic research payments under IRC § 41(e)(1)(A)	Credit is limited to 100% of the first $25,000 in tax liability + 75% of the tax liability ion excess of $25,000	Due with Maine Tax Return
Maryland	Basic R&D Tax Credit and Growth R&D Tax Credit	Maryland offers two credits for R&D activities. These credits are available to corporations and flow through entities with research activities performed in Maryland. The state credit uses the same definitions of qualified research expenses and qualified research as the federal credit.	3% of qualifying expenses for the basic credit. 10% of qualifying expenses over the base amount for growth credit		Claim due by November 15th using Commerce’s online system
Massachusetts	Massachusetts research credit	This credit is available to corporations and flow through entities (with some limitations) that performed R&D in Massachusetts	10% credit for QREs that qualify for the Federal credit, 15% credit to basic research payment for costs related to donations and contributions made to research organizations. If the entity had 0 QREs in the previous 3 taxable years a credit of 5% is applied to QREs for the current taxable year	– Credit amount is limited to: ○ 100% of the corporations first $25,000 of corporate excise tax liability ○ 75% of such liability over $25,000 The credit cannot reduce the corporation’s tax below the min tax of $456	Due with Massachusetts Tax Return on Form Schedule RC
Michigan	Research and Development Expenses Tax Credit	This credit is available to corporations and flow through entities with R&D performed in Michigan. Taxpayers qualifying for the federal tax credit automatically qualify for the state credit. Total credits claimed from the state credit and the federal credit must not exceed 65% of tax due.	1.9% of qualified research expenses		Due with Michigan Tax Return
Minnesota	Credit for Increasing Research Activities	This credit is available to corporations and flow through entities with research activities performed in Minnesota. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code	10% of first $2M of qualified expenses over base amount and 2.5% on excess		Due with Minnesota Tax Return
Mississippi	N/A			There is no state specific tax credit. You may still qualify for the federal tax credit (link).
Missouri	N/A			There is no state specific tax credit. You may still qualify for the federal tax credit (link).
Montana	N/A			There is no state specific tax credit. You may still qualify for the federal tax credit (link).
Nebraska	Research Tax Credit	This credit is available to corporations and flow through entities with research activities performed in Nebraska. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code.	15% of Federal credit amount. Entities that have expenditures in R&D activities in conjunction with a university in Nebraska can claim a credit of 35% of the federal credit.		Due with Nebraska Tax Return
Nevada	N/A	/td>		There is no state specific tax credit. You may still qualify for the federal tax credit (link).
New Hampshire	Research and Development Tax Credit	This credit it available to corporations and flow through entities with qualified manufacturing research and development expenditures that took place in New Hampshire.	10% of qualified expenses	The application should be submitted with federal form 6765 by June the following tax year in which the R&D was performed. Annual limit is $7M per year for all interested entities. Credit can’t exceed $50,000 per fiscal year for the entity.	Application (Form DP-165) due by 6/30 using online portal, “Granite Tax Connect”
New Jersey	Research and Development Tax Credit	This credit is available to corporations only with R&D activities performed in New Jersey.	10% of qualified expenses over the base amount + 10% of the basic research payments		Due with New Jersey Tax Return
New Mexico	Research and Development Small Business Tax Credit and Technology Jobs Tax Credit	New Mexico offers two tax credits for R&D activities.	R&D Small Business Tax Credit: 50% of the sum of all gross receipt taxes, compensating taxes, or withholding taxes. Technology Jobs Tax Credit: 4% of qualified expenditures (8%) if in a rural area.	– 25 or less employees in a calendar month. – Total revenue of no more than $5 million dollars in any fiscal year. – Did not in any calendar month have more than 50% of its voting securities or other equity interest with the right to designate or elect the board of directors or other governing body of the qualified business owned directly or indirectly by another business. – Has made QRE’s for the period of 12 calendar months ending with the month for which the credit is sought of at least 20% of its total expenditures for those 12 months. Technology Jobs Tax Credit: Qualified Research: research meant discover information that is: – Technological in nature – Intended to be useful in the development of a new or improved business component of the taxpayer, and – Related to a new or improved function, performance, reliability or quality, but not related to style, taste, or cosmetic or season design factors. Qualified Facility: A factory, mill, plant, refinery, warehouse, dairy, feedlot, building or complex of buildings located in New Mexico. – – These include the land on which the facility is located, and all machinery, equipment and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility. – Any facility operated by the taxpayer for the United States is excluded. Qualified Expenditures: any expenditure or allocated portion of an expenditure connected to qualified research at a qualified facility.
North Carolina	North Carolina Research and Development Tax Credit	This credit is available to corporations and flow through entities with R&D performed in North Carolina. Additionally, to be eligible, taxpayers must meet the wage standard for employees, provide health insurance for employees, maintain a good environmental record, and have a good Occupational Safety and Health Act record.	See notes	There are five different credit rates: Small business: 3.25% Low-tier research: 3.25% University research: 20% Eco-industrial park: 30% Other expenses: 1.25% – 3.25% dependent on level of expenses. If more then one category applies to an expense, the higher rate will be used.
North Dakota	Income Tax Credit for Research and Experimental Expenditures	This credit is available to corporations and flow through entities with R&D performed in North Dakota.	25% for the first $100,000 of qualifying expenses over the base amount and 8% for excess. ASM (2019+): Credit is 17.5% of the first $100k of North Dakota alternative excess R&D expenses + 5.6% of amount in excess of $100k	North Dakota alternative excess R&D expenses: QREs incurred in North Dakota that exceed 50% of the avg QRE incurred in North Dakota over the last 3 tax years	Due with North Dakota Tax Return
Ohio	Ohio R&D Investment Tax Credit	This credit is available to corporations and flow through entities with R&D performed in Ohio. The state credit closely follows the definition of qualified expenses from the Federal credit and uses the Alternative Simplified Credit calculation method.	7% of qualifying expenses over the base amount		Due with Ohio Tax Return
Oklahoma	N/A			This credit is available to corporations and flow through entities with R&D performed in North Carolina.
Pennsylvania	Pennsylvania Research and Development Tax Credit	This credit is available to corporations, flow through entities, sole proprietors, and partnerships with research activities performed in Pennsylvania. The state credit uses the same definition of qualified research expenses as the federal credit.	10% of qualifying expenses over the base amount. 20% for qualified small businesses	Caps total R&D credit at $55M per year ($11M for qualified small businesses)	Claim due by September 15th
Rhode Island	Research and Development Expense Credit	This credit is available to corporations and flow through entities with R&D performed in Rhode Island. Qualified research expenditures and base period expenses are defined the same as in the Federal Tax Credit.	22.5% for the first $111,111 of qualifying expenses over the base amount and 16.9% for excess	This credit is applied to 50% of tax due after all other credits have been applied. Can’t be reduced below minimum tax.	Due with Rhode Island Tax Return
South Carolina	Tax Credit for Research and Development Expenditures	This credit is available to corporations and flow through entities with R&D activities performed in South Carolina.	5% of qualified expenses	Can’t exceed 50% of tax liability after all other credits have been applied	Due with South Carolina Tax Return
South Dakota	N/A			This credit is available to corporations and flow through entities with R&D performed in North Carolina.
Texas	Texas Research and Development Tax Credit	This credit is available to corporations and flow through entities with R&D performed in Texas. Taxpayers can elect to claim the credit to offset a portion of their income tax or to put it towards sales and use tax exemption on the purchase or lease of depreciable, tangible property used in qualified research in Texas	2.5-6.125% of qualified expenses	Credit rate changes depending on previous QREs, and work done through a university.	Franchise Tax Form due May 15th (or extended to November 15th)
Utah	Tax Credit for Research Activities	This credit is available to corporations and flow through entities with R&D performed in Utah. Qualified research expenditures are defined the same as in the Federal Tax Credit.	5% of qualified expenses over the base amount for incremental method, 5% of certain payments made to a qualified organization increasing basic research in Utah above a base amount, and 7.5% of qualified expenses for flat credit		Due with Utah Tax Return
Vermont	Vermont Research and Development Tax Credit	This credit is available to corporations and flow through entities that have performed R&D acuities in Vermont.	27% of the Federal tax credit amount		Due with Vermont Tax Return
Virginia	Research and Development Expense Tax Credit	This credit is available to corporations and flow through entities that performed R&D activities in Virginia.	15% on the first $300,000 qualified expenses over the base amount with a cap of $45,000 (20% if R&D was conducted with a Virginia university or college)	Refundable	Must be mailed. Application due no later than September 1st. (i.e. postmarked by September 1st)
Washington	N/A			This credit is available to corporations and flow through entities with R&D performed in North Carolina.
West Virginia	N/A			This credit is available to corporations and flow through entities with R&D performed in North Carolina.
Wisconsin	Wisconsin Credit for Increasing Research Expenses	This credit is available to corporations and flow through entities with R&D performed in Wisconsin	5.75% of qualified expenses over the base amount. If the entity has no QREs for the last 3 taxable years can claim a credit of 2.865% of current year QREs.	Wisconsin also offers the Research Credit for Activities Related to Internal Combustion Engines the Research Credit for Activities Related to Certain Energy Efficient Products	Due with Wisconsin Tax Return
Wyoming	N/A			This credit is available to corporations and flow through entities with R&D performed in North Carolina.

STATE

CREDIT NAME

STATE SPECIFIC REQUIREMENT

CREDIT RATE

NOTE

DEADLINE

Alabama

N/A

There is no state specific tax credit. You may still qualify for the federal tax credit.

Alaska

Alaska R&D Tax Credit

This credit is available to corporations and flow through entities that have QREs under RC § 41. Corporations who qualify for the federal credit qualify for the Alaska state credit

18% of federal R&D credit

QREs do not need to be conducted in Alaska to qualify but must be conducted within the U.S. Credits may be used against Alaska tax liabilities.

Arizona

Research and Development Income Tax Credit

This credit is available to corporations and flow through entities and can be claimed on R&D expenses based in Arizona. Starting in 2010, a qualifying company may be eligible to claim a partial refund

24% on the first $2.5 million qualifying expenses over the base amount and 15% on any in excess. To claim a partial refund of up to 75% of the excess credit amount a company must be

Calendar year taxpayers file on or a day after the first business day after the close of the previous calendar year. Fiscal year taxpayers file on or after the first business day after the end of the fiscal year.

Arkansas

n-House Income Research Tax Credit, In-House Research by a targeted business credit, Research and Development in an area of strategic value tax credit, University Based

These credits are available to corporations and flow through entities and can be claimed on R&D expenses based in Arkansas.

20-30% of qualifying expenses over the base amount

Arkansas offers four credits for R&D activities performed in state. Tax credit rates differ depending on work done with Arkansas colleges or universities.

California

Research and Development Tax

This credit is available to corporations and flow through entities and can be claimed on R&D activities performed in California. The California research credit follows the same definitions of research activities and qualified research expenditures as the federal tax credit

15% on qualifying expenses over the base amount + 24% of basic research payments

California uses the AIRC method rather than the ASC method. California’s definition of gross receipts: sales of real, tangible, or intangible property held for sale to customers in the ordinary course of the taxpayer’s business delivered or shipped to a purchaser in California.

Current year claims are submitted with the tax return. Entities can amend a prior year California tax return to claim R&E Credit if the applicable statue of limitations is open. Statue of limitations is generally 4 years from original due date or return, or one year from date of overpayment

Colorado

Research and Development Tax Credit for Enterprise Zones

The qualifying research activities do not have to be performed within Colorado. The entity must be in an enterprise zone and must have been operating in the same enterprise zone for 3 years.

3% on qualifying expenses over the base amount

Rolling deadline: Submit with Colorado income tax return

Connecticut

Research and Experimental Expenditures Tax Credit

This program is available to corporations and flow through entities who perform R&D in Connecticut. Taxpayers elect to use the incremental method or the non-incremental method. A qualified small business who cannot take the tax credit due to having no tax liability may exchange the tax credit with the state for a credit refund of 65% of the value of the tax credit.

20% with the incremental method, 6% with the non-incremental method (limitations apply)

Qualified small business: Gross income for the previous income year that is

Delaware

Credit for Research and Development Expenses

This program is available to corporations and flow through entities who perform R&D in Delaware. Taxpayers elect one of two methods to calculate the credit. The total credit is capped at 50% of the taxpayer’s tax due in any one taxable year.

10% of qualifying expenses over the base amount or 50% of Delaware’s appointed share of the taxpayer’s federal R&D tax credit

Small businesses with

Must submit a R&E credit application to the Division of Revenue on Form 2070AC by September 15th (after end of the taxable year for the R&D expenses to be claimed). A copy of the federal R&E form must also be submitted.

Florida

Research and Development Tax Credit

This credit is available only to C Corporations in one of the target industries outlined by the Department of Economic Opportunity in Florida.

10% of qualifying expenses over the base amount

Must claim the federal credit to claim the Florida credit. Industries outlined by the Department of Economic Opportunity: manufacturing, life sciences, information technology, aviation and aerospace, homeland security and defense, cloud information technology, marine sciences, materials science, and nanotechnology industries

Claim must be submitted between March 20th and March 27th of the same year for QREs incurred in the prior calendar year.

Georgia

Research and Development Tax Credit

This credit is available to taxpayers who have qualified research expenditures as defined by the IRC S41 in Georgia.

10% of qualifying expenses over the base amount. Limited to 50% of the company’s tax liability.

Submit with federal claim

Hawaii

Tax Credit for Research Activities

This credit is available to corporations and flow through entities that have claimed the federal research tax credit in the same tax year. The credit will can be claimed on expenses based in Hawaii.

State credit = Federal tax credit x (amount of QREs incurred in Hawaii/ amount of QREs in federal tax credit)

The credit has a combined cap for all interested entity’s of $5M per year, distributed based on a first come, first-served basis.

Online applications open on March 1st and must complete an online questionnaire due March 31st. Must submit claim by the end of the 12th month following the Fiscal Year End of when the QREs were incurred

Idaho

Credit for Idaho Research Activities

This credit is available to corporations and flow through entities with research activities taken place in Idaho. The state credit uses the same calculation methods as the federal tax credit.

5% of qualifying expenses over the base amount

Due with Idaho Tax Return

Illinois

The Illinois Research and Development Credit

This credit is available to corporations and flow through entities with research activities performed in Illinois. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code.

6.5% of qualifying expenses over the base amount

Two Options: Research Expense Credits & R&D Sales Tax Exemption

Due with Illinois Tax Return

Indiana

Indiana Research Expense Tax Credit

This credit is available to corporations and flow through entities with research activities performed in Indiana.

15% of first $1M qualifying expenses over the base amount and 10% in excess. Entities with 0 QREs in the last 3 taxable years can claim a tax credit of 5% of the entity’s Indiana QRE for the current taxable year.

There is an 100% sales tax exemption for qualified R&D equipment and property purchased

Due with Indiana Tax Return

Iowa

The Iowa Research Activities Tax Credit

This credit is available to corporations and flow through entities with qualifying activities as defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.” performed in Iowa. The credit can be calculated using the regular credit method or the simplified credit method.

6.5% of qualifying expenses over the base amount (RRC) or 4.55% of QREs for the past three years (ASC)

Fully refundable after the entity’s tax liabilities are met. Companies that receive awards from the Iowa Economic Development Authority under the Enterprise Zone Program or High-Quality Jobs Program can apply a Supplemental Research Activities Credit: additional 10% of QRE for gross revenues $20M

Due with Iowa Tax Return

Kansas

Kansas Research and Development Credit

This credit is available only to c-corporations with research activities performed in Kansas. The state credit uses the same definition of qualified research expenditures as the federal tax credit.

6.5% of qualifying expenses over the base amount

Due with Kansas Tax Return

Kentucky

Qualified Research Facility Tax Credit

This credit is available to taxpayers with qualified costs of construction of research facilities in Kentucky.

5% of the qualified costs of construction, remodeling, expanding and equipping facilities in Kentucky for qualified research

This credit may be applied against income taxes imposed by KRS 141.020 (individual income tax), KRS 141.040 (corporation income tax), or KRS 141.0401 (limited liability entity tax [“LLET”]. Construction of research facilities is defined as the constructing, remodeling, and equipping facilities in Kentucky, or expanding existing facilities to conduct qualified research.

Schedule QR is due with Kentucky Form 720 filing

Louisiana

Louisiana Research and Development Tax Credit

This credit is available to corporations and flow through entities with research activities performed in Louisiana. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code. Ineligible entities, unless specifically invited by the Secretary of LED to: Professional services firms that do not have a pending or issued US patent related to the QREs claimed; and Entities primarily engaged in custom manufacturing and custom fabricating that do not have a pending or issued US patent related to the QREs claimed.

5-30% of qualifying expenses over the base amount depending on the size of the business

This credit has 3 types of calculation methods depending on the size of the corporation. Before applying for the state credit, the taxpayer must apply for, and receive, a credit certification from the Department of Economic Development. There is an application fee of 0.5% of the credit applied for with a minimum of $500 and a maximum of $15,000.

Due with Louisiana Tax Return

Maine

Research Expense Tax Credit

This credit is available to corporations and flow through entities with R&D performed in Maine. Qualified research expenditures and base period are defined the same as in the Federal Tax Credit.

5% of qualifying expenses over the base amount + 7.5% of basic research payments under IRC § 41(e)(1)(A)

Credit is limited to 100% of the first $25,000 in tax liability + 75% of the tax liability ion excess of $25,000

Due with Maine Tax Return

Maryland

Basic R&D Tax Credit and Growth R&D Tax Credit

Maryland offers two credits for R&D activities. These credits are available to corporations and flow through entities with research activities performed in Maryland. The state credit uses the same definitions of qualified research expenses and qualified research as the federal credit.

3% of qualifying expenses for the basic credit. 10% of qualifying expenses over the base amount for growth credit

Claim due by November 15th using Commerce’s online system

Massachusetts

Massachusetts research credit

This credit is available to corporations and flow through entities (with some limitations) that performed R&D in Massachusetts

10% credit for QREs that qualify for the Federal credit, 15% credit to basic research payment for costs related to donations and contributions made to research organizations. If the entity had 0 QREs in the previous 3 taxable years a credit of 5% is applied to QREs for the current taxable year

– Credit amount is limited to: ○ 100% of the corporations first $25,000 of corporate excise tax liability ○ 75% of such liability over $25,000 The credit cannot reduce the corporation’s tax below the min tax of $456

Due with Massachusetts Tax Return on Form Schedule RC

Michigan

Research and Development Expenses Tax Credit

This credit is available to corporations and flow through entities with R&D performed in Michigan. Taxpayers qualifying for the federal tax credit automatically qualify for the state credit. Total credits claimed from the state credit and the federal credit must not exceed 65% of tax due.

1.9% of qualified research expenses

Due with Michigan Tax Return

Minnesota

Credit for Increasing Research Activities

This credit is available to corporations and flow through entities with research activities performed in Minnesota. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code

10% of first $2M of qualified expenses over base amount and 2.5% on excess

Due with Minnesota Tax Return

Mississippi

N/A

There is no state specific tax credit. You may still qualify for the federal tax credit (link).

Missouri

N/A

There is no state specific tax credit. You may still qualify for the federal tax credit (link).

Montana

N/A

There is no state specific tax credit. You may still qualify for the federal tax credit (link).

Nebraska

Research Tax Credit

This credit is available to corporations and flow through entities with research activities performed in Nebraska. Qualifying activities are defined as “a new or improved function, performance, or reliability or quality.” in Section 41 of the Internal Revenue Code.

15% of Federal credit amount. Entities that have expenditures in R&D activities in conjunction with a university in Nebraska can claim a credit of 35% of the federal credit.

Due with Nebraska Tax Return

Nevada

N/A

/td>

There is no state specific tax credit. You may still qualify for the federal tax credit (link).

New Hampshire

Research and Development Tax Credit

This credit it available to corporations and flow through entities with qualified manufacturing research and development expenditures that took place in New Hampshire.

10% of qualified expenses

The application should be submitted with federal form 6765 by June the following tax year in which the R&D was performed. Annual limit is $7M per year for all interested entities. Credit can’t exceed $50,000 per fiscal year for the entity.

Application (Form DP-165) due by 6/30 using online portal, “Granite Tax Connect”

New Jersey

Research and Development Tax Credit

This credit is available to corporations only with R&D activities performed in New Jersey.

10% of qualified expenses over the base amount + 10% of the basic research payments

Due with New Jersey Tax Return

New Mexico

Research and Development Small Business Tax Credit and Technology Jobs Tax Credit

New Mexico offers two tax credits for R&D activities.

R&D Small Business Tax Credit: 50% of the sum of all gross receipt taxes, compensating taxes, or withholding taxes. Technology Jobs Tax Credit: 4% of qualified expenditures (8%) if in a rural area.

– 25 or less employees in a calendar month.
– Total revenue of no more than $5 million dollars in any fiscal year.
– Did not in any calendar month have more than 50% of its voting securities or other equity
interest with the right to designate or elect the board of directors or other governing body of the qualified business owned directly or indirectly by another business.
– Has made QRE’s for the period of 12 calendar months ending with the month for which the credit is sought of at least 20% of its total expenditures for those 12 months.
Technology Jobs Tax Credit:
Qualified Research: research meant discover information that is:
– Technological in nature
– Intended to be useful in the development of a new or improved business component of the taxpayer, and
– Related to a new or improved function, performance, reliability or quality, but not related to style, taste, or cosmetic or season design factors.
Qualified Facility: A factory, mill, plant, refinery, warehouse, dairy, feedlot, building or complex of buildings located in New Mexico. –
– These include the land on which the facility is located, and all machinery, equipment and other real and tangible personal property located at or within the facility and used in connection with the operation of the facility.
– Any facility operated by the taxpayer for the United States is excluded. Qualified Expenditures: any expenditure or allocated portion of an expenditure connected to qualified research at a qualified facility.

North Carolina

North Carolina Research and Development Tax Credit

This credit is available to corporations and flow through entities with R&D performed in North Carolina. Additionally, to be eligible, taxpayers must meet the wage standard for employees, provide health insurance for employees, maintain a good environmental record, and have a good Occupational Safety and Health Act record.

See notes

There are five different credit rates: Small business: 3.25% Low-tier research: 3.25% University research: 20% Eco-industrial park: 30% Other expenses: 1.25% – 3.25% dependent on level of expenses. If more then one category applies to an expense, the higher rate will be used.

North Dakota

Income Tax Credit for Research and Experimental Expenditures

This credit is available to corporations and flow through entities with R&D performed in North Dakota.

25% for the first $100,000 of qualifying expenses over the base amount and 8% for excess. ASM (2019+): Credit is 17.5% of the first $100k of North Dakota alternative excess R&D expenses + 5.6% of amount in excess of $100k

North Dakota alternative excess R&D expenses: QREs incurred in North Dakota that exceed 50% of the avg QRE incurred in North Dakota over the last 3 tax years

Due with North Dakota Tax Return

Ohio

Ohio R&D Investment Tax Credit

This credit is available to corporations and flow through entities with R&D performed in Ohio. The state credit closely follows the definition of qualified expenses from the Federal credit and uses the Alternative Simplified Credit calculation method.

7% of qualifying expenses over the base amount

Due with Ohio Tax Return

Oklahoma

N/A

This credit is available to corporations and flow through entities with R&D performed in North Carolina.

Pennsylvania

Pennsylvania Research and Development Tax Credit

This credit is available to corporations, flow through entities, sole proprietors, and partnerships with research activities performed in Pennsylvania. The state credit uses the same definition of qualified research expenses as the federal credit.

10% of qualifying expenses over the base amount. 20% for qualified small businesses

Caps total R&D credit at $55M per year ($11M for qualified small businesses)

Claim due by September 15th

Rhode Island

Research and Development Expense Credit

This credit is available to corporations and flow through entities with R&D performed in Rhode Island. Qualified research expenditures and base period expenses are defined the same as in the Federal Tax Credit.

22.5% for the first $111,111 of qualifying expenses over the base amount and 16.9% for excess

This credit is applied to 50% of tax due after all other credits have been applied. Can’t be reduced below minimum tax.

Due with Rhode Island Tax Return

South Carolina

Tax Credit for Research and Development Expenditures

This credit is available to corporations and flow through entities with R&D activities performed in South Carolina.

5% of qualified expenses

Can’t exceed 50% of tax liability after all other credits have been applied

Due with South Carolina Tax Return

South Dakota

N/A

This credit is available to corporations and flow through entities with R&D performed in North Carolina.

Texas

Texas Research and Development Tax Credit

This credit is available to corporations and flow through entities with R&D performed in Texas. Taxpayers can elect to claim the credit to offset a portion of their income tax or to put it towards sales and use tax exemption on the purchase or lease of depreciable, tangible property used in qualified research in Texas

2.5-6.125% of qualified expenses

Credit rate changes depending on previous QREs, and work done through a university.

Franchise Tax Form due May 15th (or extended to November 15th)

Utah

Tax Credit for Research Activities

This credit is available to corporations and flow through entities with R&D performed in Utah. Qualified research expenditures are defined the same as in the Federal Tax Credit.

5% of qualified expenses over the base amount for incremental method, 5% of certain payments made to a qualified organization increasing basic research in Utah above a base amount, and 7.5% of qualified expenses for flat credit

Due with Utah Tax Return

Vermont

Vermont Research and Development Tax Credit

This credit is available to corporations and flow through entities that have performed R&D acuities in Vermont.

27% of the Federal tax credit amount

Due with Vermont Tax Return

Virginia

Research and Development Expense Tax Credit

This credit is available to corporations and flow through entities that performed R&D activities in Virginia.

15% on the first $300,000 qualified expenses over the base amount with a cap of $45,000 (20% if R&D was conducted with a Virginia university or college)

Refundable

Must be mailed. Application due no later than September 1st. (i.e. postmarked by September 1st)

Washington

N/A

This credit is available to corporations and flow through entities with R&D performed in North Carolina.

West Virginia

N/A

This credit is available to corporations and flow through entities with R&D performed in North Carolina.

Wisconsin

Wisconsin Credit for Increasing Research Expenses

This credit is available to corporations and flow through entities with R&D performed in Wisconsin

5.75% of qualified expenses over the base amount. If the entity has no QREs for the last 3 taxable years can claim a credit of 2.865% of current year QREs.

Wisconsin also offers the Research Credit for Activities Related to Internal Combustion Engines the Research Credit for Activities Related to Certain Energy Efficient Products

Due with Wisconsin Tax Return

Wyoming

N/A

This credit is available to corporations and flow through entities with R&D performed in North Carolina.