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The Arkansas Research and Development Tax Credit, administered through the Arkansas Economic Development Commission (AEDC) and the Arkansas Science and Technology Authority (ASTA), incentivizes businesses to invest in qualified research activities within the state. Enacted under Ark. Code Ann. § 15-4-2708 and related provisions in Title 26 (e.g., §§ 26-51-1101 to 1105), these credits offset income tax liabilities and support innovation in sectors like biotechnology, advanced manufacturing, and information technology.
Eligibility requires performing qualified research activities in Arkansas that align with federal IRC § 41 standards, adapted for state programs. Businesses must obtain approval via project plans submitted to AEDC or ASTA. Note: Arkansas defines "qualified research expenditures" (QREs) more narrowly than federal rules, focusing primarily on wages and fringe benefits for in-house, targeted, and strategic programs (supplies, equipment purchases, and most contract research are excluded).
Federal QREs (for stacking with state credits) include additional categories like supplies, general contract research (65% of payments), and computer rentals, which do not qualify for Arkansas state credits.
Arkansas offers an incremental method for standard in-house research and a flat-rate variant for certified targeted, strategic value, or university-based programs. Calculations use Arkansas-sourced QREs only and require federal R&D qualification.
Arkansas tailors its R&D credits to foster targeted innovation, with certifications unlocking higher rates and unique benefits like credit sales.
Arkansas provides a 20% credit on incremental in-house QREs (primarily wages) and 33% for targeted, strategic value, or university-based research, administered by AEDC and ASTA under Ark. Code Ann. § 15-4-2708 and related provisions in Title 26, with narrower QRE definitions than federal IRC § 41.
Eligible activities include experimental development of new products, processes, or software in Arkansas, such as biotech innovations or manufacturing prototypes. Strike Tax identifies qualifying projects through federal-aligned tests, noting Arkansas's focus on wage-based QREs.
For $1 million in incremental QREs, you could save $200,000 at 20%, or up to $330,000 at 33% for certified programs (capped at $50,000 for strategic). Stack with federal credits. Use Strike Tax’s R&D Credit Calculator for estimates.
Credits are nonrefundable but offset up to 100% of income tax liability and carry forward for 9 years. Targeted credits may be sold. Strike Tax maximizes utilization.
Submit a project plan to AEDC or ASTA for certification, obtain Certificate of Tax Credit, and attach to your income tax return. Strike Tax handles documentation and filing.
Yes, stack state and federal credits on the same QREs for amplified savings (federal includes broader categories like supplies). Strike Tax optimizes claims across both.
ASTA approval via project plan review unlocks 33% rates for strategic or university research, ensuring compliance with innovation tests. Essential for higher credits.
Biotechnology, advanced manufacturing, and IT sectors see the highest returns due to targeted 33% rates and university partnerships. Strike Tax tailors to your industry.
Strike Tax ensures ASTA compliance, maximizes 20-33% rates, and simplifies sales for targeted credits, delivering expert support for Arkansas innovators.
For new facilities, base is $0 for years 1-3 (full QREs qualify); then Year 3 for Year 4, Year 4 for Year 5. Existing facilities use pre-agreement year as initial base.
Use our calculator to estimate your potential federal and state benefits
Schedule a consultation to structure your row crop research activities
Connect with us to find out how R&D tax credits can boost your organization’s bottom line.
Arkansas provides a research and development credit. Arkansas’ Research and Development programs are intended to provide incentives for university-based research, in-house research, and R&D in qualified start-up businesses. Tax credits under these programs can offset up to 100% of a business’s tax liability in a given year.
Research Park Support Donation Credit: A credit is available for Donation Made To An Accredited Institution of Higher Education To Support A Research Park. The amount of the credit is 33% of a qualified donation made to an accredited institution of higher education to support a research park authority.
In-House Research Income Tax Credit: A business that conducts "in-house" research within a research facility that is operated by the eligible business may claim a credit equal to 20% of the amount spent on in-house research that exceeds the base year for a period of three years and the incremental increase in qualified research expenditures for the succeeding two years.
In-House Research by Targeted Business Income Tax Credit: A credit is available for qualified research expenditures incurred in connection with a financial incentive agreement with the Economic Development Commission. The amount of the credit is 33% of qualified research expenditures for each of the first five years of the financial incentive agreement.
In-House Research in Area of Strategic Value Income Tax Credit: A taxpayer who invests in in-house research in an area of strategic value; or a project under the research and development programs offered by the Arkansas Science and Technology Authority and approved by its Board of Directors may claim a credit equal to 33% of qualified research expenditures for each of the first five years of the financial incentive agreement.
Learn more about Arkansas' R&D Tax Credits and Incentives.
R&D Tax Credit Available:
Yes
Eligible Entities:
C-Corporation, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Application
Data Required to Compute Credit:
Claim Period Arkansas Qualified R&D Expenses (QREs)
Credit Carryforward:
9 Years
To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.
Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.
Arkansas provides a 20% credit on incremental in-house QREs (primarily wages) and 33% for targeted, strategic value, or university-based research, administered by AEDC and ASTA under Ark. Code Ann. § 15-4-2708 and related provisions in Title 26, with narrower QRE definitions than federal IRC § 41.
Eligible activities include experimental development of new products, processes, or software in Arkansas, such as biotech innovations or manufacturing prototypes. Strike Tax identifies qualifying projects through federal-aligned tests, noting Arkansas's focus on wage-based QREs.
For $1 million in incremental QREs, you could save $200,000 at 20%, or up to $330,000 at 33% for certified programs (capped at $50,000 for strategic). Stack with federal credits. Use Strike Tax’s R&D Credit Calculator for estimates.
Credits are nonrefundable but offset up to 100% of income tax liability and carry forward for 9 years. Targeted credits may be sold. Strike Tax maximizes utilization.
Submit a project plan to AEDC or ASTA for certification, obtain Certificate of Tax Credit, and attach to your income tax return. Strike Tax handles documentation and filing.
Yes, stack state and federal credits on the same QREs for amplified savings (federal includes broader categories like supplies). Strike Tax optimizes claims across both.
ASTA approval via project plan review unlocks 33% rates for strategic or university research, ensuring compliance with innovation tests. Essential for higher credits.
Biotechnology, advanced manufacturing, and IT sectors see the highest returns due to targeted 33% rates and university partnerships. Strike Tax tailors to your industry.
Strike Tax ensures ASTA compliance, maximizes 20-33% rates, and simplifies sales for targeted credits, delivering expert support for Arkansas innovators.
For new facilities, base is $0 for years 1-3 (full QREs qualify); then Year 3 for Year 4, Year 4 for Year 5. Existing facilities use pre-agreement year as initial base.
