States with a research credit
As of September 2026- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan back for 2025
- Minnesota
- Missouri
- Nebraska
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Dakota
- Ohio
- Oregon semiconductor research only
- Pennsylvania
- Rhode Island
- South Carolina
- Texas against the franchise tax, rebuilt for 2026
- Utah
- Vermont
- Wisconsin
Some of these are narrow: limited to certain industries, zones, or buildings, or paid from a yearly pool that runs out. Virginia's credits covered tax years through 2024, and the 2026 legislative session did not renew them. The list moves most years, so treat it as a starting point and check the state's own rules.
What changes from state to state
- Rate and baseSome states copy the federal formula. Others measure growth over a base built from in-state receipts or past spending, and a few pay a flat rate on all in-state research.
- How much tax it can cutCaps are common, often a share of the year's state tax, with the rest carried forward for a set number of years.
- Cash for companies with little taxA few states pay out part of the credit. Arizona refunds part of it for smaller companies, Iowa's new program is refundable, and Minnesota's became partly refundable in 2025.
- Paperwork and deadlinesSome states want an application or certification before the return, on a calendar of their own. Arizona opens applications at the start of the year. Iowa replaced its credit for 2026 with a smaller program limited to certain industries, which needs state certification first. Miss the window and the year can be lost.
- Section 174A conformityEach state decides whether to follow the federal deduction rules for research costs. Check the state return before assuming the federal treatment carries over. See the Section 174 guide.
Common questions
Does a state credit need its own study?
No. The same projects and interviews support both. The state side needs wages and supplies split by where the work was done, and the state's own form.
What if the work happened in more than one state?
Each state counts only the research done inside it. Wages are split by where each person did the work, and each state with a credit gets its own claim.
Our state isn't on the list. Is there anything to claim?
The federal credit is the same in every state. Companies in a state without a credit still claim it on the federal return, and a company with work in a neighboring state may have a state claim there.
Sources
Related guides
- The four-part testThe four questions that decide which projects count, federal and state.
- Form 6765The federal credit form that most state credits start from.
- Payroll tax creditThe federal option for young companies with no income tax to cut.
Thirty minutes shows whether you qualify.
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