Kansas R&D Tax Credit Summary

The Kansas R&D Tax Credit allows a taxpayer who makes expenditures in R&D activities in Kansas to claim an income tax credit.

Summary of the R&D Tax Credit for the state of Kansas:

  • The credit is 6.5 percent of the difference between the actual qualified research and development expenses for the year and the average of the actual expenditures made during the year and the two previous tax years.

    • Beginning in tax year 2013, this credit is only available to corporations that are subject to the Kansas corporate income tax (i.e., C corporations). It is not currently available to individuals, partnerships, S corporations, limited liability companies, and other pass-through entities.

  • Expenditures made for research and development purposes must be allowable under the provisions of Internal Revenue Code Section 41.

    • IRC Section 41 defines qualified research expenditures as those expenses for activities intended to discover information that eliminates uncertainty concerning the development or improvement of a product, process, technique, formula or invention.

    • “Expenditures in research and development activities” are expenditures made for research and development purposes (but not expenditures of monies made available to the taxpayer under federal or state law) that are expenses allowable for deduction, except that for taxable years commencing after December 31, 2013, expenditures in research and development activities cannot include any expenditures for the performance of any abortion.

Eligible Entities: C-Corporations Only

  • Beginning in tax year 2013, this credit shall only be available to corporations that are subject to the Kansas corporate income tax, i.e. C corporations. This credit shall not be available to individuals, partnerships, S corporations, limited liability companies, and other pass-through entities.

Deadline for Tax Filing: Due with Kansas Tax Return

  • The research and development credit is claimed by completing Form K-53 and attaching it to the taxpayer’s Kansas income tax return.

Data Required to Compute Credit

  • Claim Period Kansas Qualified R&D Expenses (QREs)

  • QREs for Prior 2 Years

 

Credit Carryforward: Indefinitely (until credit is used up)

  • The credit allowed in any one tax year is limited to 25% of the credit plus any carry forward.

  • Any remaining unused credit may be carried forward in 25% increments until the total amount of credit is used.

Refundable/Transferable Tax Credit: No

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