Louisiana Research and Development Tax Credit
Louisiana Department of Revenue
30% / 10% / 5% (tiered) of LA QRE
Tiered Louisiana R&D credit: 30% for small businesses under 50 employees
Louisiana provides a non-refundable income tax credit for qualified research expenses (QRE) incurred within Louisiana. Three-tier credit rate structure: 30% for businesses with fewer than 50 Louisiana employees; 10% for businesses with 50–99 Louisiana employees; 5% for businesses with 100 or more Louisiana employees. Louisiana follows the federal IRC §41 QRE definitions but requires expenses to be Louisiana-located. The credit is non-refundable with a 5-year carryforward — as of July 1, 2015, the prior refundable structure was eliminated. Beginning July 1, 2025, an annual statewide aggregate cap of $12 million applies on a first-come, first-served basis; all FY 2025-26 credits were exhausted upon the cap's introduction.
- Funding type
- Tax Credit
- Level
- State
- Amount
- Three-tier credit based on Louisiana employee count: 30% of Louisiana-located QRE for businesses with fewer than 50 Louisiana employees; 10% for businesses with 50–99 Louisiana employees; 5% for businesses with 100 or more Louisiana employees. Credit is non-refundable — offsets Louisiana income tax only. Unused credits carry forward up to 5 years. Annual statewide aggregate cap: $12 million beginning July 1, 2025 (first-come, first-served). All FY 2025-26 credits were exhausted — next available July 1, 2026.
- Realistic amount
- A 20-person Baton Rouge technology startup with $300,000 of Louisiana-located R&D wages earns $90,000 in credit (30% × $…
- Deadline
- Rolling — claimed annually on Louisiana income tax return
- Status
- active
- States
- LA
- Payment model
- tax offset
Who qualifies
- Must conduct qualified research activities physically located within Louisiana following federal IRC §41 four-part test
- Three-tier credit rates by Louisiana employee count: 30% for fewer than 50 employees; 10% for 50–99 employees; 5% for 100 or more employees — count measured at any point during the taxable year
- Qualified research expenses include: wages of Louisiana-based employees performing, supervising, or supporting research; Louisiana supplies consumed in research; 65% of Louisiana contract research payments
- All entity types eligible: C-corporations, S-corporations, LLCs, partnerships, sole proprietors with Louisiana income tax filing obligation
- Credit is NON-REFUNDABLE as of July 1, 2015 — excess over Louisiana income tax liability carries forward up to 5 years (prior refundable structure no longer applies)
- Annual statewide aggregate cap of $12 million beginning July 1, 2025 — allocated first-come, first-served. FY 2025-26 cap exhausted; credits next available July 1, 2026
- Volume-based calculation — applies to total Louisiana-located QRE with no base-period calculation required
- No minimum revenue or project size requirements; Louisiana employee count determines credit rate tier
What it covers
Eligible expenses
- Wages of Louisiana-based employees directly performing qualified research activities
- Wages of Louisiana-based employees directly supervising or supporting qualified research
- Supplies and materials consumed or destroyed in Louisiana-located research
- 65% of payments to contractors for qualified research conducted in Louisiana
- Computer rental costs for Louisiana-located qualified research
Ineligible expenses
- Research conducted outside Louisiana even by Louisiana-resident employees
- Research funded or reimbursed by a third party (government contracts, client-funded R&D)
- Social sciences, arts, humanities, cosmetic design changes
- Market research and consumer preference testing
- Research after commercial production begins
- Routine quality assurance and data collection not involving technological uncertainty
- Capital equipment purchases
How to apply
-
1
Determine your employee count tier
Count your employees at any point during the taxable year to determine whether you qualify for the 30% small business rate (fewer than 50) or the 5% standard rate (50+). Part-time and full-time employees typically both count — document your headcount as of the rate-determination date.
~1 hrs
-
2
Identify Louisiana-located qualified research expenses
Calculate QRE using federal IRC §41 definitions but restrict to Louisiana-located activities. Wages for employees physically performing research in Louisiana, Louisiana-location supplies, and 65% of contractor payments for Louisiana-conducted work qualify. Build project-level timesheets showing Louisiana activity.
~5 hrs
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3
Apply the correct tiered credit rate to Louisiana QRE
Multiply your total Louisiana-located QRE by the applicable rate: 30% (if fewer than 50 Louisiana employees), 10% (if 50–99 employees), or 5% (if 100+ employees). Louisiana does not require a base-period calculation — the full QRE earns the credit.
~1 hrs
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4
Complete Louisiana Form R-6410
File Form R-6410 (Research and Development Tax Credit) to calculate and claim the credit. Attach to your Louisiana income tax return — Form CIFT-620 (corporations), Form IT-540 (individuals), or the applicable pass-through return. The form tracks the credit computation and refundable portion.
~3 hrs
-
5
File and track carryforward
Submit your Louisiana income tax return with Form R-6410 by May 15 (or extension). The credit offsets Louisiana income tax liability; any unused credit carries forward up to 5 years (not refundable). Maintain a vintage-year carryforward schedule. File early — the annual $12M statewide cap is first-come, first-served starting July 1.
~2 hrs
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6
Maintain supporting documentation
Retain Louisiana-specific QRE documentation: employee project timesheets showing Louisiana work location, supply invoices, contractor agreements with Louisiana research scope. Louisiana Department of Revenue audit periods align with federal §41 standards. Keep records for at least 3 years.
~3 hrs
The 30% rate for sub-50-employee companies is exceptional — most states offer 5-10%. However, two critical 2025 changes: (1) the credit has been non-refundable since 2015 — no cash refund, only future tax offset up to 5 years; (2) an annual $12M statewide cap starts fresh each July 1, first-come, first-served. File the moment the new fiscal year opens or you may lose out.
Deadline & timing
Claimed on Form R-6410 (Research and Development Tax Credit) filed with the Louisiana income tax return. Louisiana corporate income tax returns are due May 15 (or the 15th day of the 5th month after fiscal year end). Individual returns due May 15. Extensions available. IMPORTANT: The $12M annual statewide cap is first-come, first-served starting July 1 each year — file as early as possible once the new fiscal year opens. FY 2025-26 cap was fully exhausted; credits next available July 1, 2026.
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Last reviewed 2026. GrantCompass is an independent funding-discovery tool and is not affiliated with any government agency. Always confirm details on the official program page.