R&D Tax Credit
Regular vs. ASC Calculations
The federal R&D tax credit generally ranges from 8% to 10% of Qualified Research Expenses (QREs). The rate depends on which calculation method you use, how research spending has trended over the base period, and whether you elect the 280C reduced credit. State credits can range from 5% to more than 20%.
Mitch Feldman · Co-Founder · R&D Tax Credit Practice · Houston, Texas·October 29, 2026
Regular credit method
The regular method compares current-year QREs to a historical base amount. It can produce a higher credit rate, especially when QREs are steady or declining, but it requires detailed historical records of gross receipts and research spending.
Alternative Simplified Credit (ASC)
The ASC compares current-year spending to your average research spending from the prior three years. It is often more accessible for businesses with growing R&D investment or limited historical records.
Choosing a method
The better method is the one supported by your records and spending pattern. We calculate both where the data allows, then document the election so the claim stays consistent with IRS rules.
This article is general information, not legal or tax advice. For how FCA applies this to a claim, see R&D Tax Credits.