Research and Development Tax Credit (CA Franchise Tax Board Business Tax Credits)

Category: State Incentives

The California R&D Tax Credit offers a permanent tax credit for qualified research expenses incurred while conducting qualified research in California. Designed to encourage companies to increase their basic research and development activities in California, the R&D tax credit allows companies to receive a credit of 15% for qualifying in-house research expenses and 24% for basic research payments to an outside company or university. Qualifying expenses include:

• Employees wages for researchers, supervisors and support services
• Supplies used in conducting the research
• Amounts paid to outside consultants for the right to use personal property for research