State R&D Tax Credits: Doubling the Benefit for Innovators (2022)

While the federal R&D Tax Credit often gets the most attention, many states also offer their own versions of the credit. And in 2022, several states expanded or extended these programs. This means innovative companies could claim both federal and state R&D credits, multiplying their tax savings.

Like the federal credit, state incentives reward businesses for developing new products, improving processes, or investing in technical innovation. However, eligibility rules, credit amounts, and filing requirements vary widely by state. Some programs mirror the federal definition of Qualified Research Expenses (QREs), while others are more restrictive or more generous.

By layering state credits on top of the federal R&D Tax Credit, companies can maximize their benefit and reinvest even more into growth. For businesses operating in multiple states, the opportunity is even greater, as each location may provide its own set of incentives.

If your company engaged in research and development activities in 2022, it’s worth reviewing both federal and state programs to ensure you’re capturing the full value available to you.