Forty states plus DC offer a research and development tax credit in some form. ¹ For our R&D-intensive clients filing in multiple states, the patchwork of state credits is its own substantial workstream. The state credits do not stack neatly with the federal §41 credit ² (each state has its own QRE definition, base computation, and refundability rules), and the most generous programs (Arizona, Louisiana, Indiana refundable up to 100% of QREs) are not where most of our clients operate. This field guide ranks the 40 state regimes by net benefit for closely-held businesses.

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