R&D Tax Credits in Pennsylvania

Can I Claim R&D Tax Credits in Pennsylvania?

Yes, you can claim R&D tax credits in Pennsylvania. The state offers a research and development tax credit program known as the Research and Development Tax Credit.


The R&D Tax Credit Program in Pennsylvania stands out by enabling businesses to monetize their unused R&D tax credits, granting them extra resources for enhancing and growing their operations. This initiative proves especially advantageous for startups and small enterprises lacking sufficient capital to fully leverage their R&D tax credits. Through the sale of these credits, companies can secure vital funding to sustain their research and development endeavors, driving progress in technology and maintaining competitiveness within their industries. By capitalizing on this program, businesses can access the financial support needed to fuel innovation and propel their growth.

What are the Potential Benefits of the Pennsylvania R&D Tax Credit?

Pennsylvania R&D tax credits for qualifying companies lead to substantial cost savings and various advantageous benefits.

  • Financial Incentive
  • Encourages Innovation
  • Increasing Cash Flow
  • Reducing Your Tax Rate


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Who Can Claim the Pennsylvania R&D Tax Credit?

In order to be eligible for the Pennsylvania R&D Tax Credit, a company must fulfill specific requirements. They must demonstrate a commitment to research and development by investing in such activities for a minimum of two years. It is essential to comply with the tax laws and regulations set by the Commonwealth of Pennsylvania, as determined by the Department of Revenue.

Additionally, the company must have incurred research expenses for qualified research and development carried out within Pennsylvania. The definition of "qualified research and development" can be found in section 41(d) of the Internal Revenue Code. By meeting these requirements, businesses can take advantage of the Pennsylvania R&D Tax Credit, which serves as a motivating factor for companies involved in innovative pursuits within the state.  

The activities that qualify for the Pennsylvania R&D tax credit are the same ones driving growth in your business.

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How Do I Claim the Pennsylvania R&D Tax Credit?

Pennsylvania offers a lucrative R&D Tax Credit program for businesses engaged in research and development. By meeting the required research expenditure threshold, companies can benefit from this program. Through a straightforward online application, businesses can receive up to 10% of their qualifying research expenses above the baseline amount as a tax credit. Eligible small firms have the potential to receive an even more substantial credit of 20%. The baseline amount is determined by averaging the qualifying research expenses from the previous four years.