Arkansas R&D Tax Credits

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.

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Learn more about Arkansas' R&D Tax Credits and Incentives.

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R&D Tax Credit Available:

Yes

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Eligible Entities:

C-Corporation, S-Corporations, LLCs, Partnerships

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Deadline for Tax Filing:

Application

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Data Required to Compute Credit:

Claim Period Arkansas Qualified R&D Expenses (QREs)

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Credit Carryforward:

9 Years

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The R&D tax credit equals:

• 10% of QREs (In-House R&D)
• 33% of QREs incurred each year, for up to five years (In-House Research by a Targeted Business, Research and Development in Area of Strategic Value, and University Based R&D)

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Specific Items to Note:

• The income tax credit for research by a targeted business may not be used with other in-house R&D incentives or any other incentive in Act 182 of 2003 for the same expenditures.
• The maximum credit that can be earned by a business is $10,000 per tax year and is equal to 20% of QREs.
• Credits can be claimed for up to 100% of the tax liability.