R&D Tax Credit Benefits by State

Many states offer the R&D tax credit benefits, which generally follow the federal regulations and IRS guidance on what constitutes Qualified Research expenditures (QREs). However, some states are an exception to the federal guidelines, such as Connecticut and California. For example, Connecticut has a lower threshold defining expenditures under Section 174, allowing more significant spending to qualify as for the R&D tax credit benefits. However, California utilizes a different definition of gross receipts. It only includes sales of real, tangible, or intangible property held for sale to customers. Thus, in the ordinary course of the taxpayer’s trade or business delivered or shipped to a purchaser within California, and does not include service-related receipts, rents, or interest.

*State offering R&D tax credit

*States without R&D tax credit

Summary of states offering R&D tax credit:

States without R&D tax credit:

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