State R&D Tax Credits

Search your state below to learn more about what the State R&D Tax Credits has to offer.

Not all states offer their own R&D Tax Credits but your business may still be eligible for the R&D Tax Credits  

to learn more about your state R&D Tax Credits or assess your eligibility and potential benefits.

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 of its current year excess R&D credit.

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 qualified for the R&E tax credit and employee less than 150 FTE.

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. If the current year credit has been exhausted, the taxpayer can apply on the first business day of the next year (Entity has not filed tax return with revenue for the tax year in which R&D credit is generated for)

Arkansas In-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 Research and Development Tax Credit 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 California Research Credit 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

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.

R&D Small Business Tax Credit:
– 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.

Claim is due within one year following the end of the calendar year in which the QREs were made.

New York New York R&D Tax Credit This credit is available to corporations and flow through entities with R&D performed in New York. Entity must be a strategic business that is aiming to create jobs or make significant capital investments.

50% of federal R&D credit that relates to R&D QREs in New York State.

Capped at 3% of New York State QREs. Refundable tax credit

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.

Oregon 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.

Learn More About The R&D Tax Credits