State R&D Tax Credit Updates to Watch in 2024

After several years of adjustments and expansions across different states, the landscape of state-level R&D tax credits is holding steady in 2024. Unlike in 2023, when Iowa tightened eligibility rules and Missouri reintroduced its credit program, there have been no major legislative changes to state R&D incentives this year.

What This Means for Businesses

• No new rules to track: Companies operating in states with existing credits can rely on the same provisions used in prior filings.

• Opportunities remain strong: State credits continue to stack with the federal R&D Tax Credit, often multiplying the potential benefit.

• Documentation still critical: Even with no changes, states vary in how they define Qualified Research Expenses (QREs), making detailed recordkeeping essential.

Looking Ahead

While 2024 brings stability, businesses should keep an eye on state legislatures. Incentives are frequently debated, and shifts in budgets or economic priorities could spark new changes in the future. For now, though, taxpayers can focus on maximizing both federal and state credits under the existing frameworks.