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Tax Incentive Guides & Tools
Calculators, dated law updates, state credit profiles, and reference content for business owners, design firms, and CPAs evaluating R&D credits, 179D, and cost segregation.
Companies that make or improve things
What's your R&D credit worth?
If your team develops or improves products, processes, formulas or software, see a year-by-year estimate in a few minutes.
Calculators build a full report for your company that you can save and share. Quick estimators give a fast range right on each service page.
Calculators
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R&D Tax Credit Calculator
Estimate your federal R&D credit for each open tax year, from a 2-minute quick estimate to a full analysis by role. Your report shows each year, what counts toward the credit, and the findings that apply to your company.
Estimate the 179D deduction for each building you own or designed, under the rules for its placed-in-service year. Your report shows each building's deduction, what buildings like yours achieved in our completed studies, and the findings for your portfolio.
Smaller businesses could elect to deduct domestic research costs from 2022 through 2024 on amended returns, and make a late election to take a reduced R&D credit for those years.
A Justice Department rule placed FDA-approved marijuana products and marijuana subject to a state medical marijuana license in Schedule III, effective April 28, 2026.
IRS Notice 2026-16 gives interim guidance on an elective deduction of 100% of the basis of nonresidential real property used as an integral part of manufacturing, production, or refining.
Notice 2026-11 explains which property qualifies for the permanent 100% first-year depreciation deduction for property acquired after January 19, 2025, and lets taxpayers rely on the existing bonus depreciation regulations until proposed regulations are published.
Form 7220 is the IRS form for showing that prevailing wage and apprenticeship requirements were met for each facility when a taxpayer claims the increased amount of certain credits and deductions, including the increased 179D deduction on Form 7205.
A new Texas franchise tax R&D credit took effect January 1, 2026 with a higher rate, a simpler base tied to federal research expenses, and a refund option for entities that owe no franchise tax.
For tax years beginning in 2026, the deduction runs from $0.59 to $1.19 per square foot, or $2.97 to $5.94 per square foot when prevailing wage and apprenticeship requirements are met.
The One Big Beautiful Bill Act added Section 174A, which restores the immediate deduction of domestic research and experimental costs for tax years beginning after December 31, 2024.
The One Big Beautiful Bill Act made the 100% first-year depreciation deduction permanent for qualified property acquired after January 19, 2025, ending the scheduled phase-down.
For tax years beginning in 2025 and later, California conformed to the federal alternative simplified credit method and repealed its alternative incremental credit.
Nearly 40 states offer R&D tax credits that stack with the federal Section 41 credit. Rates, refunds, and approval rules differ widely, and they change often. Here is how the programs we have profiled in depth compare.
State R&D credit programs change often. We track every program listed here and show the date each one was last updated. Before any claim, we confirm the current rules for your state.
12 states profiled. Most recent update October 26, 2026.
Alaska has no stand-alone R&D credit. Corporations instead take 18% of the federal research credit attributable to Alaska, applied against Alaska corporate income tax.
Refundable
No
Carryforward
20 yearsPlus a 1-year carryback
Pre-approval
Not required
Other ways to use it
NoneCorporations only
C corporations
Companies operating mainly in Alaska
Example value
$22,680
A C corporation doing all of its research in Alaska, with a $126,000 federal research credit, earns about $22,680 in Alaska credit.
Where claims go wrong
Only corporations benefit. Sole proprietors and individual owners of pass-through businesses get no Alaska credit.
Multistate companies receive only the share apportioned to Alaska, which can shrink the credit sharply.
The credit cannot offset the Alaska alternative minimum tax, and carryforwards are tracked on an Alaska basis, not the federal one.
Arkansas offers four R&D credit programs: up to 20% of growth in in-house research spending, and 33% for university research, targeted businesses, and strategic research areas. Every program requires state approval before the credit is earned.
Refundable
No
Carryforward
9 years
Pre-approval
RequiredAgreement with the Arkansas Economic Development Commission
Other ways to use it
SaleTargeted Business credits only, once, with approval
Arkansas manufacturers
University research partners
Targeted-industry startups
Example value
$50,000
An Arkansas manufacturer approved at the full 20% in-house rate, growing in-state research spending from $500,000 to $750,000, earns about $50,000 in Arkansas credit for the year.
Where claims go wrong
Benefits start no earlier than the date the state receives your application, so applying late forfeits credit.
The in-house rate is set by the agency director, up to 20%, and is not guaranteed.
Most program combinations are prohibited, so choosing the wrong program can cost credit.
Statute: Ark. Code Ann. § 15-4-2708 and § 26-51-1102
California offers 15% of California research expenses above a base amount under the regular method, or 3% under the alternative simplified method for tax years 2025 and later. Corporations can add 24% of qualifying basic research payments. Only research performed in California counts.
Refundable
LimitedRefund election for credit held back by the cap, through tax year 2029
Carryforward
Indefinite
Pre-approval
Not required
Other ways to use it
Assign within groupAffiliated corporations in the same combined report
Companies growing California research
Corporations with large carryforwards
Example value
$31,500
A California C corporation whose in-state research spending grew to $1,500,000 earns about $31,500 under the alternative simplified method. In the same example, the regular method produces no credit at all.
Where claims go wrong
Method choice matters. The regular method often produces no credit, and the alternative simplified election stays in place until the state consents to revoke it.
Business credits are capped at $5,000,000 a year through tax year 2029, then at the greater of $5,000,000 or 70% of net tax.
California gross receipts count only sales of property delivered in California, which changes the base for service businesses.
Georgia offers 10% of Georgia research expenses above a base amount set by your own three-year Georgia history. Credit beyond the yearly limit can offset Georgia payroll withholding by election.
Refundable
No
Carryforward
5 years10 for credits earned before 2025
Pre-approval
Not required
Other ways to use it
Payroll offsetBy election, against Georgia withholding
Manufacturers
Companies with large Georgia payrolls
Example value
$8,500
A Georgia manufacturer with $325,000 of Georgia research spending and $800,000 of Georgia receipts earns about $8,500 in Georgia credit for the year.
Where claims go wrong
You must claim the federal Section 41 credit for the same year, or the Georgia credit is lost.
Only certain industries qualify, including manufacturing, warehousing and distribution, processing, telecommunications, broadcasting, tourism, and research and development. Retail is excluded.
Credit used each year is limited to 50% of remaining Georgia income tax, and only research performed in Georgia counts.
Massachusetts offers corporations 10% of Massachusetts research expenses above a base amount, using either of two methods, plus 15% of qualifying basic research payments under the traditional method. Certified life sciences and climatetech companies can receive 90% of unused credit as a refund.
Refundable
Certified companies90% refund for certified life sciences or climatetech
Nebraska offers 15% of the federal research credit attributable to Nebraska research, or 35% for research on a Nebraska college or university campus. Starting July 1, 2026, the credit offsets income tax or refunds Nebraska sales and use tax paid, but can no longer be claimed as a refundable credit on an income tax return (LB 901, 2026).
Refundable
Sales tax refundRefundable income tax credit option ended July 1, 2026
Carryforward
20 years4 years for the on-campus credit
Pre-approval
Not required
Other ways to use it
Sales and use tax refundUp to Nebraska sales and use tax paid
University research partners
Companies buying equipment in Nebraska
Example value
$30,965
A corporation with a $250,000 federal credit, most of it from Nebraska research including a university lab, earns about $30,965 in Nebraska credit.
Where claims go wrong
Wages of newly hired Nebraska employees not verified through E-Verify are excluded.
Companies tied to designated foreign adversary countries are disqualified, including their carryforwards.
No new first claims are allowed for tax years beginning on or after January 1, 2034.
New Hampshire offers 10% of qualifying New Hampshire research wages for new or improved manufacturing processes or products, up to $50,000 per business a year. A $7,000,000 statewide annual cap means awards are often reduced pro rata.
Refundable
No
Carryforward
5 years
Pre-approval
RequiredAnnual application to the state
Other ways to use it
NoneStays with the business entity
Manufacturers
Engineering teams based in New Hampshire
Example value
$50,000
A manufacturer with $900,000 of New Hampshire research wages qualifies for the $50,000 maximum before any statewide proration.
Where claims go wrong
Only wages count. Supplies and contract research do not.
The research must aim at a new or improved manufacturing process or product, which is narrower than the federal test.
Missing the annual application deadline forfeits the year, and the program is usually oversubscribed.
New Jersey offers corporations 10% of New Jersey research expenses above a base amount, plus 10% of qualifying basic research payments. Unprofitable technology and biotechnology companies may be able to sell unused credits.
Refundable
No
Carryforward
7 years15 in specified technology fields
Pre-approval
Not requiredState approval needed to sell credits
Other ways to use it
SaleThrough the state NOL program, at 80% of value or more
Pre-profit tech and biotech
Corporations with New Jersey labs
Example value
$65,000
A New Jersey corporation with $1,200,000 of in-state research spending and $50,000 of university basic research payments earns about $65,000 in New Jersey credit for the year.
Where claims go wrong
Only corporations benefit. Individual partners and S corporation shareholders cannot use the credit.
New Jersey requires the same calculation method you use on the federal return.
The credit cannot offset the Corporate Transit Fee, and carryovers are lost if the state credit form is never filed within the four-year limitations period.
New York has no general credit based on growth in research spending. It offers targeted programs instead, including a 9% investment credit on research property, a refundable Excelsior R&D credit for approved projects, and a refundable Life Sciences credit of 15% or 20% of New York research spending for new life sciences companies.
Refundable
Several programsExcelsior, Life Sciences, and Semiconductor credits
Carryforward
15 yearsInvestment credit; refundable programs pay out
Pre-approval
Most programsState certification for Excelsior, Life Sciences, and Semiconductor
Other ways to use it
Refunds for new businessesInvestment credit carryover, by election
Life sciences startups
Semiconductor and advanced manufacturing
Companies building research facilities
Example value
$500,000
A new biotech with 8 New York employees and $3,000,000 of New York research spending can receive the $500,000 annual maximum Life Sciences credit as a refund.
Where claims go wrong
Programs cannot always be combined. Electing the investment credit's research rate rules out the follow-on employment incentive credit.
The Life Sciences credit excludes contract research and is not available for tax years beginning on or after January 1, 2028.
Certification comes before the claim, and credits can be revoked if eligibility lapses.
South Carolina offers 5% of all South Carolina research expenses, with no base amount to exceed. You must also claim the federal research credit for the same year.
Refundable
No
Carryforward
10 yearsCounted from the year expenses were incurred
Pre-approval
Not required
Other ways to use it
License fee offsetCorporate license fee as well as income tax
Steady research budgets
Pass-through businesses
Manufacturers
Example value
$50,000
A company with $1,000,000 of South Carolina research spending earns about $50,000 in South Carolina credit every year it spends at that level.
Where claims go wrong
Credit used each year is limited to 50% of remaining tax after other credits.
Without a federal Section 41 claim for the same year, the state credit is lost.
Only research performed in South Carolina counts, including work by contractors.
Texas offers a franchise tax credit of 8.722% of Texas research expenses above half of the prior three-year average, or 10.903% when the company has a research contract with a Texas college or university. This structure applies to report years 2026 and later.
Refundable
Small businessesRevenue at or below $2,650,000, or tax under $1,000
Carryforward
20 years
Pre-approval
Not required
Other ways to use it
NoneSales tax exemption option ended January 1, 2026
Companies under the no-tax-due threshold
University research partners
Growing research teams
Example value
$91,581
A Texas manufacturer that grew Texas research spending to $1,500,000 from a three-year average of $900,000 earns about $91,581 in Texas credit.
Where claims go wrong
Credit used each year is limited to 50% of franchise tax before other credits.
Refund claims have a hard November 15 deadline each report year.
Companies using the E-Z computation cannot receive refunds, and companies that used the old sales tax exemption during the period are shut out.
We do the technical study work. You keep the client relationship. Every deliverable is built so you can file from it and stand behind it.
R&D credit
What you receive
Completed Form 6765 with Section G business component detail where required, technical narratives for each qualifying activity, the wage allocation method, and a study report you can rely on if the credit is questioned.
179D
What you receive
Energy model results, the site inspection, the certification, and Form 7205, plus the allocation letter on designer claims, so the deduction is reported accurately the first time.
Cost segregation
What you receive
An engineering report with assets reclassified by recovery period, and depreciation schedules you can enter directly, including support for catching up depreciation on buildings placed in service in earlier years.
Audit Support
Studies are built to the evidentiary standard, not just to the largest number. If the IRS questions a credit or deduction we prepared, we support you through the examination, and our engineers answer the technical questions.
How We Work With Your Firm
We coordinate directly with you, fit your filing calendar, and handle your client's technical questions so you don't have to. Our law updates page tracks the dates your clients need.
Have a client engagement in mind? Reach out directly.
Cost segregation is an engineering-based study that identifies building components that can be depreciated over 5, 7, or 15 years instead of 27.5 or 39 years.
A designer allocation is the transfer of a building owner's 179D deduction to the architect, engineer, or contractor who designed the qualifying systems.
The four-part test is the set of requirements, applied separately to each business component, that research generally must meet for its costs to qualify for the R&D credit: a permitted purpose, such as a new or improved product or process; reliance on the principles of science or engineering; an effort to eliminate technical uncertainty; and a process of experimentation.
Qualified research expenses (QREs) are the costs that count toward the R&D credit: wages for employees who perform, directly supervise, or directly support qualified research; supplies used in that research; amounts paid to use computers owned and operated by others, which can include some cloud computing costs, in that research; and a share of contract research payments.
Section 179D is the federal tax deduction for energy-efficient commercial buildings, covering interior lighting, HVAC and hot water, and the building envelope.