- K.S.A. 79-32,182b – Kansas statute defining the R&D tax credit.
- Research and Development Credit – State tax incentive for qualified research activities.
- Kansas Department of Revenue (KDOR) – Agency administering Kansas state tax laws.
- Expenditures in Research and Development Activities – Costs incurred for qualified R&D within Kansas.
- Qualified Research Expenses (QREs) – Eligible costs for calculating the tax credit.
- Research Conducted Within This State (Kansas) – Activities must occur physically within Kansas borders.
- Internal Revenue Code (IRC) Section 41 – Federal law defining qualified research activities.
- IRC Section 41(c) (Base Amount) – Federal method for calculating base amount.
- IRC Section 174 (Allowable Expenses) – Federal rules for deducting research expenditures.
- Credit Percentage (10% for Post-2022) – Rate for tax years after 2022.
- Prior Credit Percentage (6.5% Pre-2023) – Rate for tax years before 2023.
- Base Amount (Three-Year Average) – Benchmark based on prior years’ spending.
- Taxable Year – Fiscal period for reporting tax liabilities.
- Tax Imposed by the Kansas Income Tax Act – State income tax against which credit applies.
- Kansas Taxable Income – Income subject to tax in Kansas.
- Credit Limitation (25% of Total Credit) – Annual claim limit of total earned credit.
- Carry Forward (Unused Credit) – Save unused credits for future tax years.
- Carry Forward Increment (25% of Credit) – Portion of credit allowed in future years.
- C Corporation (Prior Eligibility Limitation) – Previously, only C-Corps could claim this.
- Individual (Post-2022 Eligibility) – Individuals can claim credit for post-2022.
- Partnership (Post-2022 Eligibility) – Partnerships eligible for tax years after 2022.
- S Corporation (Post-2022 Eligibility) – S Corps eligible for tax years after 2022.
- Limited Liability Company (LLC) (Post-2022 Eligibility) – LLCs eligible for tax years after 2022.
- Pass-Through Entities (PTEs) – Entities passing income and credits to owners.
- House Bill 2239 (Legislation Increasing Credit) – 2022 law expanding R&D credit eligibility.
- Nonrefundable Credit – Credit cannot trigger a tax refund.
- Transferable Credit (Post-2022) – Credit can be sold to other taxpayers.
- Taxpayer Without a Current Tax Liability – Entity with no tax due to offset.
- Transferee (Recipient of Credit) – Party purchasing the tax credit.
- Transferor (Entity Earning the Credit) – Party selling or assigning the tax credit.
- Full Credit Transfer (Requirement for Transfer) – Entire credit amount must be transferred.
- One-Time Transfer Limitation – Credit can only be transferred once.
- Schedule K-53 (Credit Computation Form) – Form to calculate Kansas R&D Credit.
- Form K-204 (Research and Development Credit Application) – Administrative form for R&D credit application.
- Form K-260 (Tax Credit Transfer Notification Form) – Form used to report credit transfers.
- Documentation of Credit Acquired by Transfer – Proof required to claim purchased credits.
- Itemized Schedule of Expenditures (Required Documentation) – Detailed list of research costs for audit.
- Qualified Research (Four-Part Test) – Criteria activities must meet to qualify.
- Technological in Nature – Relies on principles of hard science.
- Elimination of Uncertainty – Attempting to discover unknown information.
- Process of Experimentation – Systematic trial and error evaluation.
- Business Component – Product or process being improved.
- Product, Process, Technique, Formula, or Invention – Types of eligible business components.
- Wages for Qualified Services – Employee pay for performing qualified research.
- Supplies for Qualified Research – Materials consumed during research process.
- Contract Research Expenses – Payments to third parties for research.
- Government-Funded Research Exclusion – Funded work does not qualify for credit.
- New or Improved (Business Component) – Innovation must enhance performance or function.
- Prior Two Income Tax Years (for Base Average) – Reference period for calculating expenditure increase.
- Tax Credit Database (Department of Commerce Reporting) – State registry tracking issued tax credits.
