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The Kansas Research and Development Tax Credit, governed by K.S.A. §79-32,182b, incentivizes businesses to invest in qualified research activities conducted within the state, providing an offset against Kansas income tax liabilities through the Kansas Department of Revenue.
Credits are available to any taxpayer performing qualified research activities in Kansas. Eligibility is based on entity type and the nature of activities and expenses, with QREs required to meet federal standards under IRC §41 but apportioned to Kansas activities (e.g., via time allocation or project location).
Kansas statute defines QREs as expenditures allowable as deductible under the federal Internal Revenue Code (including section 41), limited to activities performed in Kansas. In practice, the state follows federal section 41 definitions for qualified research expenses.
Kansas uses a single regular incremental method based on QREs only, no fixed-base percentage tied to gross receipts. The credit rewards growth in Kansas QREs over recent historical levels.
Kansas's R&D credit emphasizes accessibility for growing businesses through transferability and broad eligibility, with utilization paced over time.
A Kansas-based manufacturing firm unlocked substantial savings through strategic R&D claiming:
The Kansas R&D tax credit is a 10% incentive (post-2022) on the excess of current-year qualified research expenses over the average of current and prior two years' QREs, available to all entities for Kansas-based innovation under K.S.A. §79-32,182b. Strike Tax helps maximize your claim.
Eligible activities involve technological uncertainty resolution for developing or improving products, processes, formulas, or software, aligned with federal IRC §41, such as prototyping in manufacturing or ag-tech advancements. All must occur in Kansas; Strike Tax identifies qualifying projects.
Businesses can save 10% on incremental QREs, stackable with federal credits for up to 20%+ total offset. For $1M in excess QREs, expect $100,000 in state savings. Use Strike Tax’s R&D Credit Calculator for a personalized estimate.
Non-refundable, but unused portions carry forward indefinitely in 25% annual increments. Transferable once in full for cash if no liability, Strike Tax optimizes carryforward and transfer strategies.
For tax years 2023 and later, first submit Form K-204 application to the Department for certification before claiming on your Kansas income tax return using Schedule K-53, typically supported by federal Form 6765 or equivalent documentation. For transfers, file Form K-260. Strike Tax handles documentation and filing to ensure compliance.
Taxpayers without liability can transfer the full credit once to another entity via Form K-260, submitted with returns. The transferee claims it immediately, subject to 25% limits, ideal for startups; consult Strike Tax for valuation.
No major 2025 updates; the 10% rate, all-entity eligibility, and transferability from 2023 remain in effect. Ongoing federal alignment (e.g., OBBB expensing restoration) enhances stacking, Strike Tax monitors for impacts.
Kansas allows credits on expenses that are also eligible for the federal credit; there is no specific Kansas prohibition on claiming both, maximize via coordinated documentation. Strike Tax optimizes dual claims for sectors like manufacturing.
Broad eligibility, 10% rate on early excesses, and one-time transferability provide immediate value without profitability hurdles. Indefinite carryforward supports scaling, Strike Tax tailors for emerging ag and tech firms.
Strike Tax ensures IRC §41 compliance, calculates excesses accurately, manages transfers/carries, and files Schedules K-53/K-260, delivering compliant, maximized credits with expert support.
Use our calculator to estimate your potential federal and state benefits.
Schedule a consultation to structure your R&D activities for maximum credits.