California · research and development · CA-RD-001
California Research Credit
Publication revised September 24, 2026. Sourcebook page 48.
Credit amount / calculation
Regular method: 15% of qualified expenses above the base, plus a corporate basic-research component. For 2025 onward, an alternative simplified method generally uses 3% of expenses above half the preceding three-year average.
Business fit and eligible activity
Qualified California research by a wood-products manufacturer may produce a state credit. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Illustrative business benefit
Under the regular method, $200,000 of accepted California research expenses above the statutory base produces $30,000 at 15%, before tax-use limits. Do not substitute the federal 14% simplified rate for the California rate.
Timing / first action
Tax-year claim: document the eligible expense, hire or placed-in-service date and meet any separate certification deadline. Identify the technical uncertainty and start contemporaneous project records before trying to calculate the credit.
Official sources
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