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