Texas changed the R&D credit on January 1, 2026.

Rate	Franchise tax credit (Subchapter T, from Jan 1, 2026)
Note	Federal Form 6765 now a precondition

Three things, all at once.

• Subchapter M expired. The original Texas R&D credit, codified at Texas Tax Code Chapter 171 Subchapter M and authorized by HB 800 (83rd Legislature, 2013), applied to report periods through December 31, 2025. It is not available for the 2026 report year or later.
• Subchapter T replaced it. The new credit lives at Texas Tax Code Section 171.9201 and following. It applies to report periods beginning January 1, 2026.
• The sales tax exemption is gone. Tax Code Section 151.3182 (the qualified-research sales tax exemption) is not available for report periods after December 31, 2025. The franchise tax credit is now the only Texas R&D incentive.

If you carried unused Subchapter M credit forward from 2024 or 2025, it is still claimable. The Texas Comptroller routes Subchapter M carryforward through lines 8 and 9 of the 2026 Form 05-181 (Credits Summary Schedule).

The new credit is calculated against qualified research expenses attributable to research conducted in Texas. The Comptroller defines the Texas QRE pool by reference to federal IRS Form 6765: specifically, the portion of the qualified research expenses reported on Form 6765 that is attributable to research conducted in Texas.

That reference creates a hard requirement: you cannot claim the Subchapter T credit unless you have filed federal Form 6765 with the IRS for the same year. The Texas Comptroller treats Form 6765 filing as a precondition.

For a Texas SaaS company, the practical impact is that the federal and state credits now share one documentation foundation. Whatever supports your federal Section 41 claim also supports the Texas credit, provided the QREs are properly attributed to research conducted in Texas (employee location, contractor performance location, supplies consumed in Texas).

The forms involved for a standard 2026 report:

• Form 05-158-A and 05-158-B, the Texas franchise tax long-form report.
• Form 05-181, Credits Summary Schedule (used to claim the Subchapter T credit on the franchise tax return).
• Form 05-182, Subchapter T Schedule (the per-credit-year detail).
• Form 05-178, Research and Development Credit form (for credit computation).

A separate refundable-credit path exists for taxable entities that do not owe Texas franchise tax (those that qualify under the No Tax Due Threshold, have a computed tax under $1,000, or are a qualifying veteran-owned business). The refund application uses Form 05-183 and Form 05-184. Form 05-183 is due on or before November 15 of the report year.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder is what supports your federal Form 6765 and, starting tax year 2026, the mandatory Form 6765 Section G appendix. That artifact is the same one Subchapter T now requires you to have filed federally before the Texas credit is even available.

The Texas state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• A Texas-attributable QRE breakdown (employee, contractor, and supplies expenses tied to research conducted in Texas, using the same business-component partition as the federal binder).
• Form 05-178 input values (qualified research expenses, base period calculation, credit amount).
• Filing notes for your CPA: which Texas forms apply, which lines, due dates, refundable-credit path if applicable.

We do not file Form 05-178 or sign the Texas franchise tax return. That remains your CPA's role, the same way federal Form 6765 stays with your CPA. R&D Binder produces the workpaper; your CPA files.

If you operate in multiple states, additional state workpapers are $995 each. Most states with an R&D credit track the federal QRE definition closely, so the marginal cost per state is low once the federal binder is complete.

A worked example. An Austin-based SaaS company with 14 engineers, $3.2M in qualifying wages (federal QRE pool), and 11 engineers physically located in Texas.

• Federal Section 41 credit. Computed on the full $3.2M federal QRE pool through Form 6765, claimed by the CPA. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• Texas Subchapter T credit. Computed on the Texas-attributable portion of QREs. Roughly $2.51M ($3.2M times 11/14 engineer location ratio, with the actual allocation refined by per-employee research-activity location). R&D Binder produces the Texas state workpaper as a $995 add-on; CPA claims through the appropriate Form 05-178 plus 05-181 plus 05-182 stack.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus Texas state workpaper add-on ($995). Total $5,990.

The CPA files both. R&D Binder never appears on the federal or Texas return.

If the Texas Comptroller examines a franchise tax return on which the Subchapter T credit was claimed, the substantiation expected is the same kind of documentation the IRS expects under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, QRE allocation by employee, contractor, and supplies. The binder R&D Binder produces is built to that standard from the federal side, and the Texas workpaper inherits the same business-component structure.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for a Texas Comptroller examination is a separate scope at $250 per hour, scoped per-incident. We do not represent before the Texas Comptroller; that remains your CPA's responsibility or your tax controversy attorney's.

• Texas Tax Code Chapter 171, Subchapter T (Section 171.9201 et seq.), Franchise Tax Credit for Research and Development Activities.
• Texas Tax Code Chapter 171, Subchapter M (repealed effective January 1, 2026; carryforward of pre-2026 credits still available).
• Texas Tax Code Section 151.3182 (sales tax exemption for qualified research, not available for report periods after December 31, 2025).
• Texas Comptroller, Franchise Tax Credit for Research and Development Activities.
• Texas Comptroller, Sales Tax Exemption or Franchise Tax Credit for Qualified Research.
• Texas Comptroller Form 05-178 (Research and Development Credit), Form 05-181 (Credits Summary Schedule), Form 05-182 (Subchapter T Schedule), Form 05-183 and Form 05-184 (refundable credit application and affiliate list).
• IRS Form 6765 (federal Credit for Increasing Research Activities), required as a precondition for Subchapter T eligibility.

This page is general informational content, not tax advice for any specific taxpayer. The Texas Subchapter T credit is administered by the Texas Comptroller of Public Accounts. Form numbers and procedural requirements reflect the Comptroller's published guidance as of May 2026. Confirm current forms and deadlines with your CPA or the Comptroller before filing.

• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• Arizona R&D credit
• California R&D credit
• Connecticut R&D credit
• Delaware R&D credit