State R&D credits, state by state
Many states stack their own research credit on top of the federal one. Each guide pairs the state rules with the federal Section 41 work R&D Binder already produces.
- Arizona - 24 percent on the first $2.5M of QRE above the base plus 15 percent on the excess, with a 75 percent cash refund for businesses under 150 FTE.
- California - 15 percent regular credit or 3 percent ASC after SB 711 (2025), which repealed the Alternative Incremental Method and made carryforward indefinite.
- Connecticut - Two stacked credits (20 percent incremental and 1 to 6 percent non-incremental) with a 65 percent cash refund for qualified small businesses.
- Delaware - Fully refundable: 10 percent of the increase in Delaware research over a base, or 50 percent of the Delaware-apportioned federal credit (doubled to 20/100 percent for small businesses). For research conducted in Delaware, not where you are incorporated. 30 Del. C. 2070-2075; Form BUS-RDC.
- Georgia - 10 percent of incremental QRE over a Georgia gross-receipts base, with a federal Form 6765 claim required first.
- Idaho - 5 percent of the increase in Idaho QRE over a base, plus 5 percent of basic research payments, for research conducted in Idaho. Nonrefundable, 14-year carryforward (one of the longest). Idaho Code 63-3029G; Form 67.
- Illinois - 6.5 percent of the increase in Illinois QRE over a three-year average base, non-refundable, five-year carryforward, extended through tax years ending on or before December 31, 2031.
- Indiana - 15 percent of the increase in Indiana QRE over a base on the first $1 million of the increase, 10 percent above, for research conducted in Indiana. Nonrefundable, 10-year carryforward, no carryback. An alternative 10 percent method is available. Schedule IT-20REC.
- Iowa - Senate File 657 replaced the Research Activities Credit with an application-based IEDA program for tax years beginning in 2026: up to 3.5 percent of Iowa QRE, refundable, capped at $40 million statewide and allocated pro rata, limited to qualifying sectors, with an annual application and an independent CPA verification required.
- Maryland - 10 percent of QRE above the Maryland base, $250,000 per-applicant cap, refundable for small businesses, application due November 15. Sunsets January 31, 2031.
- Massachusetts - 10 percent on incremental QRE plus 15 percent on basic research payments, with a 15-year carryforward.
- Michigan - Reinstated for tax year 2025 (Public Acts 186 and 187 of 2024): a refundable credit of 3 percent of Michigan QRE up to a base plus 10 percent (250-plus employees, capped at $2 million) or 15 percent (under 250) above the base, plus 5 percent for research-university collaboration. $100 million statewide cap ($75M large, $25M small), prorated and oversubscribed for 2025. Tentative claim due to Treasury by April 1; contact-only.
- Minnesota - 10 percent of the first $2M of Minnesota QRE over a base, 4 percent above, now partially refundable under H.F. 9 (2025): a taxpayer may elect to cash out 19.2 percent of unused credit for tax year 2025 and 25 percent for 2026 and 2027. 15-year carryforward.
- Nebraska - Refundable, and the simplest to compute: 15 percent of your federal Section 41 credit (35 percent for university research), apportioned to Nebraska, with no separate state base. No application or statewide cap. Neb. Rev. Stat. 77-5801 to 77-5808; Form 3800N.
- New Jersey - 10 percent of in-state QRE over a base plus 10 percent of basic research payments, non-refundable, but unprofitable tech companies can sell unused credits and losses for cash through the NJEDA transfer program.
- North Dakota - 25 percent of the first $100,000 of the increase in North Dakota research over a base and 8 percent above, for research conducted in North Dakota. Nonrefundable but with a 3-year carryback and 15-year carryforward. N.D.C.C. 57-38-30.5.
- Pennsylvania - 20 percent for small businesses and 10 percent otherwise, with transferable (sellable) credits under a competitive annual cap.
- Rhode Island - 22.5 percent of the first $111,111 of qualifying research over a base (about $25,000 of credit) and 16.9 percent above, for research conducted in Rhode Island. Nonrefundable, limited to 50 percent of tax per year, 7-year carryforward. R.I. Gen. Laws 44-32-3.
- South Carolina - A flat 5 percent of qualified research expenses made in South Carolina, with no base subtraction (must claim the federal credit first). Nonrefundable, limited to 50 percent of tax per year, 10-year carryforward. S.C. Code 12-6-3415; Schedule TC-18.
- Texas - The franchise tax credit moved to Subchapter T on January 1, 2026, with federal Form 6765 now a precondition.
- Vermont - 27 percent of the federal Section 41 credit for research conducted in Vermont, one of the highest piggyback rates. Nonrefundable, 10-year carryforward; no separate state base. Vermont publishes claimant names annually. 32 V.S.A. 5930ii.
- Wisconsin - 5.75 percent of Wisconsin QRE exceeding 50 percent of the average for the prior 3 years (2.875 percent if no prior QRE), for research conducted in Wisconsin. Partly refundable, up to 25 percent for tax years beginning in 2024. 15-year carryforward; claimed on Schedule R.
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder; many state credits build directly on that same documentation.