State R&D Tax Credits
Increase Cash Flow by As Much As 40% in Some States
In addition to the federal R&D tax credit, many states offer a credit for expenditures to attempt to develop or improve a product, process or software, and most adopt or follow rules similar to those of the federal R&D credit.
Some states require taxpayers to file an application other than just the tax return on which the credit is claimed to be eligible for their credits. Some also limit their credit to certain industries or the amount of credits that will be allowed each year.
In many cases, though, state credits are even more generous than the federal credit. Some states have higher credits rates, allow taxpayers to sell or transfer their credits to other taxpayers, or may pay taxpayers the value of their state credits even if the taxpayers aren’t currently paying taxes (refundable credits).
Click on a state in the map below or scroll through the list to see state credit rates, whether the credit is refundable/saleable and how long unused credits may be carried forward, as well as any special considerations.
Related Resources
Treasury, IRS Release Additional Information on Clean Vehicle Provisions of Inflation Reduction Act
January 24, 2023Treasury, IRS Release Additional Information on Clean Vehicle Provisions of Inflation Reduction Act
January 24, 2023The U.S. Treasury Department and the IRS on December 29, 2022, released information on the clean vehicle provisions of the Inflation Reduction Act. The new guidance provides greater clarity to consumers and businesses that, beginning January 1, 2023, are able to access tax benefits from the law’s clean vehicle provisions.
U.S. Treasury, IRS Issue Guidance on Clean Vehicle Credits
December 18, 2022U.S. Treasury, IRS Issue Guidance on Clean Vehicle Credits
December 18, 2022The U.S. Department of the Treasury and the Internal Revenue Service on December 12 released a revenue procedure that sets out the process for manufacturers of clean vehicles to enter into written agreements with the Secretary of the Treasury whereby they agree to submit periodic written reports providing specified information regarding vehicles that are eligible for clean vehicle credits.
Treasury Issues Prevailing Wage and Apprenticeship Requirements Guidance
November 29, 2022Treasury Issues Prevailing Wage and Apprenticeship Requirements Guidance
November 29, 2022The U.S. Department of the Treasury and the Internal Revenue Service on November 29 announced the release of guidance providing taxpayers information on how to satisfy the prevailing wage and apprenticeship requirements to qualify for enhanced tax benefits under the Inflation Reduction Act’s clean energy provisions.
IRS Warns Employers to be Cautious of Schemes and Solicitations Promising Employee Retention Credit Help
October 24, 2022IRS Warns Employers to be Cautious of Schemes and Solicitations Promising Employee Retention Credit Help
October 24, 2022The IRS on October 19 issued IR-2022-183, warning employers to be wary of promotions for the employee retention credit (ERC) that sound too good to be true. According to the IRS, some third-party firms are taking aggressive or improper positions when it comes to determining eligibility for and calculating the credit.
SHARE