Special Notes: The California Research Credit rate is 15% and it adopts the federal definition of qualified research activities and qualified research expenses. It is limited to research activities conducted in California.

The credit is calculated by comparing the taxpayer’s QRE’s to their gross receipts. The California Research Credit defines gross receipts as receipts from the sale of real, tangible, or intangible property held for sale to customers in the ordinary course of the taxpayer’s trade or business that is delivered or shipped to a purchaser in California. The difference between the taxpayer’s gross receipts and qualified research expenses can significantly maximize the credit.

Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed’s has two offices in California: San Francisco (101 California St, San Francisco) and Pasadena (115 W California Boulevard, Pasadena). These two offices locations provide R&D tax credit consulting and advisory services to: Pasadena, Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, Oakland, Bakersfield, Anaheim, Santa Ana, Riverside, Stockton, Chula Vista, Irvine, Fremont, San Bernardino, Modesto, Oxnard and Fontana.

If you have any questions or need further assistance, please call or email our local California Partner on (415) 795-9976.
Feel free to book a quick teleconference with one of our California R&D tax credit specialists at a time that is convenient for you. Click here for more information about R&D tax credit management and implementation.

California R&D Tax Credit Filing Instructions

To claim the California R&D tax credit, you need to complete and file Form FTB 3523, Research Credit, with your California tax return. This form is used to calculate the amount of the credit based on your qualified research expenses (QREs) conducted within California. The credit is generally 15% of the excess of your current year QREs over a calculated base amount, plus 24% of basic research payments. Make sure to carefully review the instructions for Form FTB 3523 to accurately determine your eligibility and calculate the credit. You will need to provide details of your qualified research activities and the associated expenses.