State R&D Tax Credits

Texas

Expiration Date: 12/31/2026

Does it apply to C corps and pass-through entities?: Yes

Credit Carry forward: 20 years

Description: The credit equals 5% of the excess amount of qualified research expenses in the current year over the base amount. The base amount is 50% of the average QREs for the 3 tax years preceding the current tax year. If the taxpayer contracts with a higher education institution, then the credit increases to 6.25% of the difference between the QREs in the current year and the base amount.

Other Notes: The credit cannot offset more than 50% of the taxpayer’s tax liability. QREs are defined according to IRC §41, and expenses must be for research conducted in Texas.