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California
R&D Tax Credits

Connect with us to find out how R&D tax credits can boost your organization’s bottom line.

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This post was last updated on Apr 03, 2024.

California R&D Tax Credit

Discover the benefits of California state credits and see how your business could qualify.

15
%
of qualified expenses that exceed a base amount
24
%
of the basic research payments
33
%
of the additional credits applied to the 1.5% S-Corp entity tax
N/A
carry forward for credit usage

California R&D Tax Credit Eligibility Summary:

Is the R&D Tax Credit Available?:
Yes
No
Eligible Entities:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Due with California Tax Return
Data Required to Compute Credit:
Claim Period Qualified R&D Expenses (QREs)
What Information is needed?:
Gross Receipts for Prior 4 Years

California R&D Tax Credit Guidelines:

  • Taxpayers may elect the alternative incremental credit in which taxpayers are assigned a smaller three-tiered fixed-base percentage and a reduced three-tiered credit rate (1.49%, 1.98%, and 2.48%).
  • California offers an additional 1/3 of the credits to be applied to the 1.5% S-Corp entity tax.
  • Several states impose a dollar limit on the amount of expenses that can qualify for the research tax credit. Some states limit the amount of their research tax credits that taxpayers can claim in any one tax year. The California research tax credit does not have a dollar limitation.
  • California conforms to the federal IRC on a fixed-date basis, conforming to the code in effect on 1/1/2015; therefore, it does not conform with TCJA, which was enacted on 12/22/2017.

California R&D Tax Credit Case Study

A California-based company recovered thousands in R&D tax credits to refuel growth.

$

231,000

Total state R&D tax credits earned

50

%

Amount of wages qualified for tax credits

$

588,000

Total R&D tax credit earned

Key California R&D Tax Credits R&D Tax Rules Changes

2019' - 22
22' and after
2019' - 22
22' and after

Resources

There are many other considerations and exemptions, including what documentation the IRS requires for the R&D tax credits. Stay updated to navigate the new tax laws with confidence.

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Connect with us to find out how R&D Tax Credits can boost your organization’s performance.

Ready to Maximize Your State Credits?

With just a little info, our Strike Experts can help you start your R&D tax credit journey.

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What’s a Rich Text element?

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The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

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Ready to calculate your R&D tax credits?

To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.

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Download the app.

Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.

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