About the Credit:

1. In-House Research Income Tax Credit: Qualified companies that conduct “in-house” research that are eligible for the federal R&D credit may qualify for the Arkansas In-House R&D Credit. The credit rate is 20% of QRE’s that surpass the base year, for a period of 3 years and the incremental increase in QRE’s for the following two years.  For a start-up in-house research facility, the base year is zero, meaning the first 3 years following the date of the financial incentive agreement, all eligible expenditures can qualify for the credit.
2. In-House Research by a Targeted Business Tax Credit: Under the authority of the AEDC Executive Director, a targeted business may be granted income tax credits equal to 33% of the QRE’s incurred each year for up to five years. The application for this credit must include a project plan, the expenditures plan, the start and end dates of the project and an estimated total project costs. QRE’s are made up of in-house expenses for taxable wages paid and supplies used in the conduct of qualified research. The QRE’s must pass the federal 4-part test to qualify. Income tax credit for R&D earned by targeted businesses may be sold.
3. Research and Development in Area of Strategic Value Tax Credit: This credit is for qualifying business that invest in:
   • in-house research in an area of strategic value, meaning research in fields having long-term economic or commercial value to the state, and that have been identified in the R&D plan approved from time to time by the Board of Directors of the Arkansas Science and Technology Authority; or
   • a research and development project offered by the Arkansas Science and Technology Authority.
4. University Based Research and Development Tax Credit: A qualifying business that contracts with at least one     Arkansas college or university conducting R&D may qualify for a 33% income tax credit for QRE’s.

Notes: Each credit can offset 100% of a taxpayer’s tax due in a given year.

Click here to find out if you qualify for the federal research credit.

Swanson Reed in Arkansas provides R&D tax credit consulting and advisory services to Little Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff, Bentonville, Hot Springs, Benton, Texarkana, Sherwood, Jacksonville, Russellville, Bella Vista, West Memphis, Paragould and Cabot.

If you have any questions or need further assistance, please call us on (800) 986 4725.

Feel free to book a quick teleconference with one of R&D tax specialists at a time that is convenient for you, if you would like to learn more about R&D tax credit opportunities.