State R&D credits
R&D tax credits by state
39 states run their own R&D credit on top of the federal one. Rates, refund rules, and forms differ in every one of them. Pick your state for the current rules, verified against the state agency.
Start with the federal credit
Every state credit stacks on the federal Section 41 credit. That one is the bigger number for almost every startup, so claim it first.
- Worth 6 to 10% of qualified spend. For most startups that means engineering payroll, US contractors at 65 percent, and cloud compute.
- Cash without profit. Startups under $5M in revenue can take up to $500,000 a year against payroll taxes.
- Claimed on Form 6765. Claimship preps the study and the form package. Your CPA files it with your return.
All 50 states
AlabamaNo state creditFederal onlyAlaska18% of the federal R&D credit apportioned to AlaskaCreditArizona24% of qualified spend above a base amount, up to $2.5 million, then 15% above thatCreditArkansas20% to 33% of qualified research spend, approved case by case by AEDCCreditCalifornia15% of qualified research spending above a base amount, plus 24% of basic research paymentsCreditColorado3% of increased research spending inside a certified Enterprise ZoneCreditConnecticut6% flat for smaller companies, or a 1% to 6% sliding scale, plus a 20% incremental optionCreditDelaware10% of Delaware qualified spend above a base amount, or 20% for small businessesCreditFlorida10% of qualified spend above a base amount, capped at $9 million statewideCreditGeorgia10% of qualified research spending above a base amountCreditHawaiiEqual to the federal research credit, for certified Qualified High Technology BusinessesCreditIdaho5% of Idaho qualified spend above a base amountCreditIllinois6.5% of qualified research spending above a rolling three-year averageCreditIndiana15% of the first $1 million in Indiana research spend increase, 10% above thatCreditIowaUp to 3.5% of Iowa qualified spend, awarded at IEDA's discretion under a new capped programCreditKansas10% of the increase in Kansas research spend over a 3-year averageCreditKentucky5% of the cost to build, remodel, or equip a research facility in KentuckyCreditLouisiana5% to 30% of qualified research growth, depending on company size, plus 30% on SBIR and STTR awardsCreditMaine5% of qualified research growth, plus 7.5% of payments to universities for basic researchCreditMaryland10% of qualified spend above a base amount, capped at $250,000 per companyCreditMassachusetts10% of qualified research spending above a base amount, plus 15% of basic research paymentsCreditMichigan3% to 15% of qualified spend depending on company size, plus a university bonusCreditMinnesota10% of qualified spend above a base amount, up to $2 million, then 4% above thatCreditMississippi$1,000 per new qualifying research job each year, for up to 5 years per positionCreditMissouri15% of qualified research growth, or 20% for research done with a Missouri college or universityCreditMontanaNo state creditFederal onlyNebraska15% of the federal R&D credit, or 35% for research done at a Nebraska college or universityCreditNevadaNo state creditFederal onlyNew Hampshire10% of qualified research growth, capped at $50,000 per business within a $7 million statewide poolCreditNew Jersey10% of qualified research spending above a base amount, plus 10% of basic research paymentsCreditNew Mexico5% to 10% of qualified spend, plus an additional 5% to 10% tied to payroll growthCreditNew YorkUp to 8% of New York research spending through Excelsior, or 15% to 20% through the Life Sciences creditCreditNorth CarolinaNo state creditFederal onlyNorth Dakota25% of the first $100,000 of qualified research growth, plus 8% of growth above thatCreditOhio7% of qualified spend above a 3-year average, credited against the CATCreditOklahomaNo state creditFederal onlyOregon15% of qualified research expenses (semiconductor industry only)CreditPennsylvania10% of qualified research spending above a base amount, or 20% for qualified small businessesCreditRhode Island22.5% of the first $111,111 of excess QRE, 16.9% above thatCreditSouth Carolina5% of South Carolina qualified research expensesCreditSouth DakotaNo state creditFederal onlyTennesseeNo state creditFederal onlyTexas8.722% of qualified research spending above a base amount, or 10.903% for university-contracted researchCreditUtah7.5% of current year spend plus 5% of spend above a base amountCreditVermont27% of the federal R&D credit, based on Vermont research spendCreditVirginiaNo state creditFederal onlyWashingtonNo state creditFederal onlyWest VirginiaNo state creditFederal onlyWisconsin5.75% of qualified research expenses above a base amount (11.5% for certain research)CreditWyomingNo state creditFederal only
Most customers claim $20,000 to $250,000 in federal credit in their first year. State credits add to that in 39 states.