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State program

Missouri Research and Development Credit

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  • Offset only
  • Pre-approval required
  • Transferable

Last reviewed November 2026

Missouri has a research credit again. HB 2400 (2022) revived the Qualified Research Expense (QRE) Tax Credit for tax years beginning on or after January 1, 2023.

At a glance

  • Jurisdiction: Missouri (MO)
  • Credit name: Qualified Research Expense (QRE) Tax Credit (RSMo § 620.1039)
  • Administering agency: Missouri Department of Economic Development (DED) approves and issues credits. The Missouri Department of Revenue processes claims on returns and receives annual reports.
  • Rate(s) and base:
    • 15% of additional Missouri QREs, which are current-year Missouri QREs minus the average Missouri QREs for the three preceding tax years.
    • 20% if the research is conducted with a public or private Missouri college or university.
    • Additional QREs above 200% of the three-year average are not credited.
  • Refundable? No. The credit offsets Missouri income tax (Chapter 143, excluding withholding) and the financial institutions tax (Chapter 148).
  • Transferable? Yes. Up to 100% may be sold, assigned or transferred. File a notarized endorsement with DED naming the transferee, the amount and the value received. Both parties complete Form MO-TF.
  • Carryforward: 12 years
  • Annual cap / proration:
    • Per taxpayer: $300,000 per year.
    • Statewide: $10 million per calendar year, of which $5 million is reserved for minority- and women-owned businesses and small businesses (50 or fewer full-time employees, including affiliates).
    • Businesses less than five years old are funded first. Reserved funds not awarded by November 1 move to the general pool. Remaining awards are prorated.
  • Pre-approval / application and deadline: Required. Apply to DED in the annual window, August 1 to September 30 of the year after the expense year (for 2025 expenses: August 1–September 30, 2026). Awards are determined November 1. After approval, DED invoices an issuance fee of 2.5% of the credits (RSMo § 620.1900) and issues the credits once the fee is paid.
  • Forms:
    • DED application through the Submittable portal, with the Application Certification Statement
    • Form MO-TC (Miscellaneous Income Tax Credits), filed with the Missouri return
    • Form MO-TF, for transfers
    • Annual Tax Credit Accountability Act report
  • Sunset / recent changes: The program sunsets December 31, 2028, unless reauthorized (Missouri Sunset Act), and the section expires December 31, 2029. No amendments to § 620.1039 were enacted in the 2023–2026 sessions.

What it is

The QRE Tax Credit is an application-based, capped and transferable incremental credit for research performed in Missouri. Missouri had a similar credit from 2001 to 2004. HB 2400 restored it for tax years 2023 through 2028, with a higher 15% rate and a 20% rate for university collaboration. The same law exempts purchases of qualified research and development equipment from state and local sales and use tax.

Who can claim it

  • Eligible:
    • individuals;
    • partnerships;
    • corporations described in RSMo §§ 143.441, 143.471 or 148.370; and
    • tax-exempt charitable organizations whose Missouri unrelated business taxable income is subject to Missouri income tax.
  • Conditions:
    • The applicant must have Missouri QREs in at least one of the three preceding years and additional Missouri QREs in the application year.
    • Entities that must register with the Secretary of State must be in good standing.
    • The applicant must be enrolled in E-Verify.
    • The applicant must have a Missouri tax clearance certificate.
  • Not eligible: governmental entities.
  • Pass-through entities: credits are allocated to members, partners or shareholders in proportion to ownership on the last day of the tax period.

How it is calculated

  1. Missouri QREs = IRC §41 QREs for research conducted in Missouri.
  2. Additional QREs = current-year Missouri QREs − the average Missouri QREs for the three preceding tax years. This amount is capped at 200% of that average.
  3. Credit = 15% × additional QREs, or 20% for research conducted with a Missouri college or university.
  4. Limit the credit to $300,000 per taxpayer, then apply the $10 million program cap, the $5 million special cap and proration.
  5. DED reduces the credit for any delinquent Missouri taxes before issuing it.

Example: if the three-year average is $75,000, additional QREs are capped at $150,000, so the maximum 15% credit is $22,500.

How to claim it

  1. Gather the documents:
    • FEIN or SSN, and Missouri Tax ID;
    • Form 6765 for the application year and the three prior years;
    • Secretary of State good standing certificate;
    • E-Verify MOU and affidavit;
    • leadership and ownership information;
    • Missouri tax clearance certificate (requested from DOR on Form 943);
    • small business proof (Form 941 or SUTA filing) or MBE/WBE attestation or certification, if applicable;
    • for the 20% rate, the university agreement or statement of work and an itemized expense list;
    • for new-business priority, formation documents.
  2. Apply through DED's Submittable portal between August 1 and September 30 of the year after the expense year. DED gives ten business days to fix an incomplete application. If it is still incomplete at September 30, it is denied.
  3. After awards on November 1, pay the 2.5% issuance fee. DED then issues the credit.
  4. Claim the credit on Form MO-TC and the appropriate line of the Missouri return. To sell it, file the notarized endorsement with DED, and both parties complete Form MO-TF.
  5. File the annual report required by the Tax Credit Accountability Act (RSMo § 135.805) with DOR by June 30 for three years after the credits are issued. A report more than three months late carries a penalty of 1% of the credit value per month (capped at 10%) for the first report and 1.5% per month (capped at 20%) for each later report. The original recipient stays responsible even after a transfer.

Recent changes

  • HB 2400 (2022), effective August 28, 2022: revived § 620.1039 for tax years beginning on or after January 1, 2023, with:
    • 15% and 20% rates;
    • the 200% limit;
    • a $300,000 per-taxpayer cap;
    • a $10 million statewide cap with a $5 million set-aside;
    • 12-year carryforward;
    • full transferability;
    • a sales and use tax exemption for R&D equipment; and
    • a sunset of December 31, 2028.
  • DED program guidelines (July 29, 2025): set the annual application window at August 1–September 30, with award determinations on November 1. The 2025 tax year cycle ran August 1–September 30, 2026.
  • 2025–2026 sessions: no enacted amendments to § 620.1039. The current version has been in effect since August 28, 2022.
  • Amendment 5 (August 4, 2026 election): voters rejected a legislatively referred constitutional amendment that would have phased out the state income tax and replaced the revenue with sales taxes. Missouri income tax, and so the value of the credit, is unchanged.

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 Missouri and other locations, how Missouri amounts reconcile to federal Form 6765, the Missouri credit and carryforward schedule for each year claimed, and whether the claiming entity is the one subject to Missouri tax.

  1. Provide the DED approval, the issuance invoice and the issued credit amount, and show that the amount on MO-TC matches.
  2. Reconcile the Missouri QREs in the application to Form 6765 for the application year and the three prior years. Show that the research was performed in Missouri.
  3. Show the additional QRE calculation, including the three-year average and the 200% limit.
  4. For the 20% rate, provide the agreement with the Missouri college or university and the itemized expenses.
  5. For the special cap or new-business priority, provide the small business (50 or fewer employees, including affiliates), MBE/WBE or formation evidence.
  6. For transferred credits, provide the notarized endorsement filed with DED and Forms MO-TF. For purchased credits, provide the transferee documentation.
  7. Provide the Tax Credit Accountability Act annual reports and the 12-year carryforward schedule.

Common weak spots

  • Missing the August 1–September 30 application window.
  • No Missouri QREs in any of the three prior years, so the applicant is ineligible.
  • Additional QREs not limited to 200% of the three-year average.
  • Benefit modeled without the $300,000 limit, the program cap and proration, or the 2.5% issuance fee.
  • Small-business status claimed without counting affiliates.
  • Annual Tax Credit Accountability Act reports not filed after a transfer.
  • Assuming the credit continues after 2028 without reauthorization.

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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