How Texas Can Benefit from R&D Tax Credits

The Research and Development Tax Credit can apply to more industries than most Texan companies are aware of and the benefits allow for Texas to stay at the forefront of innovation.

Job Creation

The R&D tax credit drives for the creation of more jobs.  Utilizing the R&D Tax credit will make Texas more innovative, more attractive and more prosperous.  In Texas alone, over 50,000 companies can benefit from this credit, allowing these companies to earn more money, hire more qualified employees and grow and expand their business.

Not Just Technology

Many businesses have been missing out on this tax credit because they assumed this legislation would only benefit those who use test tubes and work in a lab.  On the contrary, agricultural, farming, manufacturing, oil and gas, architecture and healthcare companies are also applicable.  Especially in rural parts of Texas, this may mean exponential growth for agricultural and farming businesses.

Some have thought that only large, corporate companies could apply but many small to mid range companies may also benefit from this tax credit.


This tax credit allows for companies to have a credit against their research expenses for the year.  The base amount for Texas being 50% of the average of your past three years’ research expenses.

The credit amounts are as follows:

  • 5% for those who have had research
  • 2.5% those who have not

Higher education can benefit as well:

  • 6.25% for companies who have three years of research
  • 3.125% for companies who have not

In addition, any unclaimed credits can be applicable for up to 20 successive years.

For further assistance and any questions or concerns please contact Texas R&D Tax Credit Solutions tax advisers.