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Alabama
Not an opportunity for Alabama.
Alaska
Not an opportunity for Alaska.
Arizona
Credit for Increased Research Activities
This credit is available to corporate taxpayers, corporate partners, exempt organizations subject to corporate income tax on unrelated business taxable income (UBTI), or S corporation shareholders.
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Arizona-based expenses. Credit follows federal regular credit computation and requires a base computation.
Credit percentage: 24% on incremental expenses over base amount if taxpayer has $2.5MM or less in qualified QREs, 15% if over.
Arkansas
In-House Research Income Tax Credit
This credit is available to C Corporations, S Corporations, LLCs, and Partnerships
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Arkansas-based expenses. Credit is incremental.
20% (33% for Targeted Business) on incremental expenses over base amount. The base amount is the prior year’s QREs.
California Research Credit
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include California-based expenses. Credit follows federal regular credit method, also has an Alternative Incremental Research Credit (AIRC) method.
15% on incremental expenses over the base amount
Colorado
Research and Development Income Tax Credit for Enterprise Zones
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Colorado-based expenses.
3% on incremental expenses over base amount similar to federal ASC.
RC – Research and Experimental Expenditures Tax Credit (incremental) RDC - Research and Development Tax Credit (non-incremental)
C Corps only
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Connecticut-based expenses. Two credits available.
20% on incremental increase in R&D expenses that are conducted in CT. 6% on non-incremental R&D expenses (less the QREs from the incremental Credit) with limitations.
Delaware
Delaware Research and Development Tax Credit
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Delaware-based expenses. Two calculation methods.
10% on incremental expenses over the base amount similar to the federal regular method. 50% on federal R&D credit apportioned to Delaware for smaller taxpayers.
District of Columbia
Not an opportunity for District of Columbia.
Florida
Research and Development Tax Credit for Florida Corporate Income Tax
Only applies to “business enterprises,” which includes C and S corporations but excludes partnerships and LLC’s taxed as partnerships.
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Florida-based expenses and must be in a “targeted industry”.
10% on incremental expenses over base amount.
Research and Development Tax Credit
Yes
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Georgia based expenses.
10% on incremental expenses over base amount.
Hawaii
Tax Credit for Research Activities
Yes
Refundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Hawaii based expenses.
% on federal credit based on percentage of Hawaii-based expenses to federal expenses
Idaho
Credit for Idaho Research Activities
C Corps, S Corps, partnerships, trusts, and estates
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Idaho-based expenses.
5% on incremental expenses over base amount similar to regular federal credit method.
Research & Development Credit
Yes
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Illinois-based expenses.
6.5% on incremental expenses over the average of the three prior years.
Indiana
Indiana Research Expense Tax Credit
Yes
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Indiana based expenses.
15% on first $1,000,000 of incremental research expenses over a base amount and 10% on incremental expenses in excess of $1,000,000. Calculation similar to federal regular method. Alternative method: 10% credit on incremental expenses similar to federal ASC method.
Iowa
Research Activities Credit (RAC)
Yes
Refundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Iowa based expenses and certain industries allowed or excluded.
6.5% on the incremental expenses with a calculation similar to the regular federal method Alternatively, 4.55% on expenses that exceed a base amount similar to federal ASC.
Kansas
Credit Against Tax for Certain Research and Development Activity Expenditures
C Corps only
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Kansas-based expenses.
6.5% on incremental expenses over base amount. Base amount is equal to average of current plus two prior years.
Kentucky
Not an opportunity for Kentucky.
Research and Development Tax Credit
Yes
A non-refundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities except only include Louisiana-based expenses. You must apply for the credit. Professional services and custom manufacturing companies do not qualify.
30% on incremental expenses over base amount for companies with 0-49 employees 10% on incremental expenses over base amount for companies with 50-99 employees 5% on incremental expenses over base amount for companies with more than 100 employees
Maine
Research Expense Tax Credit
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Maine-based expenses.
5% on incremental expenses over base amount.
Maryland
Basic R&D Tax Credit and Growth R&D Tax Credit
Yes
Two nonrefundable credits (Basic and Growth) with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Maryland-based expenses.
Credit percentage: 3% on Maryland expenses for Basic Credit. 10% on incremental expenses over base amount for the Growth Credit.
Research Credit
It applies to corporations paying excise tax under MGL c 63
Two nonrefundable credits (Fixed Base Ratio and ASC) with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Massachusetts-based expenses.
10% on incremental expenses for Fixed Base Ratio method. 7.5% on incremental expenses for 2020 (10% for 2021 and after) for ASC method.
Michigan
Not an opportunity for Michigan.
Minnesota
Credit for Increasing Research
Yes, but not to Sole Proprietorships
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Minnesota-based expenses.
10% on first $2 million of incremental expenses; 4% on incremental expenses in excess of $2 million.
Mississippi
Not an opportunity for Mississippi.
Missouri
Not an opportunity for Missouri.
Montana
Not an opportunity for Montana.
Nebraska
Research Tax Credit
Applies to any business entity that is “subject to sales tax"
Refundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Nebraska-based expenses. Credit is based on Federal credit.
15% of federal credit amount.
Nevada
Not an opportunity for Nevada.
New Hampshire
Research and Development Tax Credit
Credits are available to business organizations that have expenditures made during the fiscal year and subject to Business Profits Tax.
Refundable credit with similar definition to federal, except only include New Hampshire-based wage expenses.
10% on qualified New Hampshire wage expenses, not to exceed 50,000.
New Jersey
Research and Development Tax Credit
C Corps and S Corps only
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include New Jersey-based expenses.
10% on incremental expenses similar to federal method. Regular or ASC may be chosen for calculation method.
New Mexico
Technology Jobs and Research and Development Tax Credit
C Corps, S Corps and any entity treated as a Partnership for federal income tax purposes.
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include New Mexico-based expenses.
5% of expenses or 10% of expenses if conducted in rural area. Additional credit if certain requirements are met.
New York
Not an opportunity for New York.
North Carolina
Not an opportunity for North Carolina.
North Dakota
Research Expense Credit
Yes
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include North Dakota-based expenses.
Up to 25% for regular method or up to 17.5% for ASC method, dependent on when research began in North Dakota.
Ohio
Credit for Qualified Research Expenses
The credit is only available to entities paying the Commercial Activity Tax (CAT)
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Ohio-based expenses.
7% on incremental expenses over base amount. Base amount is the average expenses from the three prior years.
Oklahoma
Not an opportunity for Oklahoma.
Oregon
Not an opportunity for Oregon.
Wyoming
Not an opportunity for Wyoming.
Research and Development Tax Credit
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Pennsylvania-based expenses.
10% (20% for "small business") on incremental expenses over base amount. Base amount is average expenses from four prior years.
Rhode Island
Research & Development Expense Credit
C Corps only
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Rhode Island-based expenses.
22.5% on incremental expenses up to $111,111 and 16.9% on expenses over $111,111.
South Dakota
Not an opportunity for South Dakota.
South Carolina
Tax Credit for Research and Development Expenditures
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include South Carolina-based expenses.
5% of expenses.
Tennessee
Not an opportunity for Tennessee.
Research & Development Tax Credit
Can apply against Franchise Tax for all business entities.
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Texas-based expenses.
5% on incremental expenses over base amount. Base amount follows federal ASC method.
Tax Credit for Research Activities in Utah (Code 12)
Yes
Two nonrefundable credits (Flat and Incremental) with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Utah-based expenses.
5% on incremental expenses over base amount for Incremental Credit 7.5% of expenses for the Flat Credit
Vermont
Research and Development Tax Credit
Yes
Nonrefundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Vermont-based expenses.
27% of the federal tax credit.
Virginia
Research and Development Expenses Tax Credit
Yes
Refundable credit with similar definition to federal for Qualified Research Expenses and Qualified Research Activities, except only include Virginia-based expenses.
15% on first $300,000 of expenses over a base amount. Limited to $45,000.
Washington
Not an opportunity for Washington.
West Virginia
Not an opportunity for West Virginia.
Wisconsin
The Basic Research Credit
Yes
Nonrefundable credit with similar definitions as federal for Qualified Research Expenses and Qualified Research Activities except only include Wisconsin based-expenses. There is additional credit available for certain industries and development zones.
5.75% on incremental expenses over base amount. Base amount follows federal ASC method.
Wyoming
Not an opportunity for Wyoming.
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