Texas and the Research and Development (R&D) Tax Credit
State Credit Name: Texas Research and Development Tax Credit
Expiration Date: December 31, 2026
Who Can Apply? Corporations and flow-through entities
Credit Carry Forward: Unused Texas R&D credit can be carried forward 20 years.
About the Credit: Starting with tax returns filed after January 1, 2014, Texas taxpayers can claim the Texas R&D state credit to offset a portion of their franchise tax or use it towards sales and use tax exemption on the purchase or lease of depreciable, tangible property used in qualified research in Texas. Our experts can assist you with everything from Austin federal credit to Houston, Dallas and everywhere between in the Lone Star State. The credit rates for the Franchise Tax Credit are the following in the state of Texas:
- 2.5% for companies who have less than 3 years of QRE’s and did not work through a university.
- 3.125% for companies who have less than 3 years of QRE’s, but did work through a university.
- 5% for companies who have 3 years of QRE’s, but did not work through a university.
- 6.125% for companies who have 3 years of QRE’s and did work through a university.
Notes: The allowable Franchise Tax Credit in any one period, including carry forward amounts, cannot surpass 50% of the franchise tax liability for that period.
Swanson Reed is one of the only companies in the United States to exclusively focus on R&D tax credit preparation. Swanson Reed’s office location at 1120 South Freeway, Fort Worth, Texas provides R&D tax credit consulting and advisory services to Houston, San Antonio, Dallas, Austin, Fort Worth, El Paso, Arlington, Corpus Christi, Plano, Laredo, Lubbock, Garland, Irving, Amarillo, Grand Prairie, Brownsville, McKinney, Frisco, Pasadena and Mesquite.
If you have any questions or need further assistance, please call or email our local Texas Partner on (817) 769-8168.
Feel free to book a quick teleconference with one of our Texas 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.
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