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State program

Kansas Research and Development Credit

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  • Offset only
  • Pre-approval required
  • Transferable

Last reviewed November 2026

At a glance

  • Jurisdiction: Kansas (KS)
  • Credit name: Kansas Research and Development Activities Credit (K.S.A. 79-32,182b)
  • Administering agency: Kansas Department of Revenue (KDOR)
  • Rate(s) and base: 10% (tax years 2023 and later; 6.5% for earlier years) of the amount by which Kansas research and development expenditures for the year exceed the average of the expenditures for the current year and the two preceding years
  • Refundable? No
  • Transferable? Yes, for credits earned in tax year 2023 and later, with limits:
    • Only a taxpayer with no current Kansas income tax liability may transfer.
    • The full credit must be transferred, and it can be transferred only once.
    • The transferee cannot get a refund.
  • Carryforward: Unused credit carries forward until used. The amount claimed in any one year is limited to 25% of the total credit plus any applicable carryforward.
  • Annual cap / proration: No statewide cap. There is a per-year usage limit of 25% of the total credit plus any applicable carryforward.
  • Pre-approval / application and deadline: Form K-204 (Research and Development Credit Application) must be submitted to KDOR before the credit is claimed or transferred, for tax year 2023 and later. No other fixed application date is set.
  • Forms:
    • Form K-204 (application)
    • Schedule K-53 (Research and Development Credit), attached to the Kansas return
    • Form K-260 (Kansas Tax Credit Transfer Notification Form), for transfers
  • Sunset / recent changes: No sunset. L. 2022, ch. 63 (HB 2239), § 41 raised the rate to 10%, extended the credit to all income taxpayers and allowed one-time transfers, all from tax year 2023. No 2024–2026 amendments to the credit have been enacted.

What it is

Kansas offers an incremental income tax credit for research and development spending in Kansas. Since 2023 the rate has been 10%. Any Kansas income taxpayer can claim it. Taxpayers with no current Kansas liability can transfer a credit once to another taxpayer. Because only 25% of the available credit can be used each year, the benefit is spread over several years.

Who can claim it

  • Tax year 2023 and later: any Kansas income taxpayer that makes qualifying R&D expenditures in Kansas. This includes individuals, partnerships, S corporations, LLCs, other pass-through entities and C corporations.
  • Tax years 2013 through 2022: only corporations.
  • Qualifying expenditures: research and development expenses that are deductible under the Internal Revenue Code. Two kinds are excluded:
    • expenditures funded by federal or state government money; and
    • for tax years after 2013, expenditures for performing an abortion (as defined in K.S.A. 65-6701).

How it is calculated

  1. Determine Kansas R&D expenditures for the current year and the two preceding years.
  2. Base = the average of those three years. Note that the average includes the current year.
  3. Credit = 10% × (current-year expenditures − base). Use 6.5% for tax years before 2023.
  4. Usable in any year = no more than 25% of the total credit plus any applicable carryforward, and no more than the tax liability. The remainder carries forward until used.

Pre-2023 credits being carried forward keep the rules in effect when they were earned.

How to claim it

  1. Complete and submit Form K-204 to KDOR before claiming or transferring the credit.
  2. Compute the credit on Schedule K-53 and attach it to the Kansas income tax return. Corporations file Form K-120; individuals and fiduciaries file their own returns.
  3. To transfer:
    • The transferor must have no current Kansas tax liability and must transfer the full credit.
    • Report the transfer on Form K-260.
    • The transferee claims the credit against its own Kansas income tax in the year of transfer. It is subject to the 25% annual limit and may carry forward any unused amount.
    • A transferred credit cannot be refunded or transferred again.

Recent changes

  • HB 2239 (L. 2022, ch. 63, § 41), effective for tax years beginning after December 31, 2022:
    • rate raised from 6.5% to 10%;
    • eligibility extended from corporations to all income taxpayers; and
    • one-time transfer of the full credit allowed for taxpayers without a current tax liability.
  • KDOR Notice 23-09 (September 6, 2023): requires Form K-204 before a claim and Form K-260 for transfers.
  • 2024–2026: no amendments to K.S.A. 79-32,182b have been enacted. The 2026 session's credit-repeal bill (HB 2757) did not touch the R&D credit, and it died after committee action without being enacted. The statute was last amended by L. 2022, ch. 63, § 41.

Likely examiner questions

These questions illustrate what an examiner may ask about this credit. They are drafts for illustration and should be reviewed by a specialist before use. Most state claims also face standard questions: where the research was physically performed, how wages, supplies and contract research were apportioned between Kansas and other locations, how Kansas amounts reconcile to federal Form 6765, the Kansas credit and carryforward schedule for each year claimed, and whether the claiming entity is the one subject to Kansas tax.

  1. Provide the Form K-204 filed for each credit year and show it was submitted before the credit was claimed or transferred.
  2. Provide Schedule K-53 with the current-year and two prior-year Kansas R&D expenditures, and show how the three-year average base was computed.
  3. Show that the expenditures were incurred in Kansas, were deductible under the Internal Revenue Code, and were not funded by government money.
  4. Show that the amount used each year did not exceed 25% of the total credit plus carryforward, and provide the carryforward schedule by credit year.
  5. For a transfer: provide Form K-260, evidence that the transferor had no current Kansas tax liability, and confirmation that the full credit was transferred only once.
  6. For a transferee: show the credit was claimed against the transferee's own Kansas income tax and was not refunded.

Common weak spots

  • Credit claimed or transferred without first filing Form K-204.
  • Base computed as a three-prior-year average instead of an average that includes the current year.
  • More than 25% of the credit plus carryforward used in one year.
  • Partial transfers, second transfers, or transfers by a taxpayer that had a current Kansas tax liability.
  • Transfers not reported on Form K-260.
  • Out-of-state or government-funded expenditures included.

Next steps

Important

This page is general information, not tax advice. Rules change; confirm current requirements with the state revenue agency or a qualified tax professional. creditARMOR is a free service. Passing this mock audit does not guarantee that your claim will pass an IRS or state examination. If needed, Swanson Reed can assist you with representation before the IRS. creditARMOR and TaxTrex are products of Swanson Reed.

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