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Previously, the Research and Development Credit was only available to corporations that were subject to the Kansas corporate income tax, i.e. C corporations. An R&D credit was not available to individuals, partnerships, S corporations, limited liability companies (LLCs), and other pass-through entities.
Kansas legislation signed into law on April 14, 2022 has reversed this limitation. After December 31, 2022, when the law goes into effect, any individual or entity, regardless of classification, is eligible for the state tax credit. Kansas taxpayers should review and prepare documentation to claim the credit in 2023.
Additionally, the recent R&D legislation also increases the credit rate from 6.5% to 10%. And, as an added bonus, taxpayers without a tax liability can transfer their R&D tax credit to another taxpayer. This transfer can only occur once and for the full amount of the credit.
The Kansas R&D credit allows a taxpayer who incurs qualified R&D expenditures associated with activities conducted in Kansas to claim a credit against their corporate income tax liability. Qualified Research Activities (QRAs) are defined as having the intent to discover information that eliminates technical uncertainty concerning the development or improvement of a product, process, technique, formula, or invention.
Utilization of the Kansas R&D credit is limited to 25% of the credit plus any carryforward. Any remaining unused credit may be carried forward in 25% increments until the total amount of credit is used. In other words, a C-Corp with sufficient tax liability must spread the credit utilization out over four tax periods.
The credit is claimed using Kansas Schedule K-53.
Learn more about the Kansas R&D Tax Credit here.
R&D Tax Credit Available:
Deadline for Tax Filing:
Due with Kansas Tax Return
Data Required to Compute Credit:
Claim Period Kansas Qualified R&D Expenses (QREs)
Indefinite (until credit is used up)
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.