Stack State Credits on Top of Federal Benefits for Maximum Savings

Program Overview

Pennsylvania offers R&D tax credits that can be combined with federal credits for the same qualifying activities, potentially doubling your tax savings from innovation investments.

Program

Credit Rate
10% of qualifying expenses above base amount (20% for small businesses)

Program Cap
$60 million annually

Carryforward
15 years

Transferable
Yes, credits can be sold with approval

Eligibility Requirements

  • Subject to PA Corporate Net Income Tax or Personal Income Tax
  • Conduct qualified R&D activities within Pennsylvania
  • Minimum 2 years of R&D spending history
  • Full compliance with all state tax obligations

  • Eligible entities

    • C-Corps
    • S-Corps
    • LLCs
    • Partnerships

Qualifying Activities & Expenses

Activities:

Software development and improvement
Manufacturing process optimization
Product design and prototyping
Engineering solutions to technical challenges
Environmental and efficiency improvements

Qualifying Expenses:

Wages
R&D personnel and direct support staff

Supplies
Materials consumed in research process

Contract Research
65% of third-party research payments

Computer Costs
R&D-specific rental/lease expenses, cloud hosting

Federal vs. Pennsylvania Credits

FEDERAL CREDIT

PENNSYLVANIA CREDIT

Rate

Rate

20% (simplified method)

10% (20% small business)

Location

Location

U.S.-based research

Pennsylvania-based only

Carryforward

Carryforward

20 years

15 years

Transferable

Transferable

No

Yes (with approval)

REAL EXAMPLE
Company with $3.3M in qualified expenses earned
$359,917 federal + $148,750 Pennsylvania credits = $508,667 total savings

Application Process

KEY DATES

Application Opens

August 1

Deadline

December 1

Eligible Period

Previous calendar year expenses

Requirements:

  • Filed Federal Form 6765

  • myPATH online application

  • Project documentation

Strategic Advantages

Double Your Savings

Claim both federal and state credits for same activities

Credit Monetization

Sell unused credits for immediate cash flow

Incremental Benefits

Higher R&D investment = greater credits

Pass-Through Flexibility

Transfer credits to owners/partners

No Sunset

Permanent program for long-term planning

Common Qualification Scenarios

  • Developing new software features or improving existing functionality

  • Automating manufacturing processes or improving production efficiency

  • Creating prototypes or testing new product designs

  • Integrating new technologies into existing systems
  • Solving technical challenges through experimentation

Why Work with Boast?

Maximize Your Credits
Our platform identifies all qualifying activities across federal and state programs

Streamlined Process
Automated documentation and application management

Expert Support
Ensure compliance with both federal and Pennsylvania requirements

Proven Results
Help clients capture every dollar they’re entitled to

Next Steps

  • 1
    Assessment: Review your PA-based R&D activities for qualification potential
  • 2
    Documentation: Implement proper tracking for qualifying expenses and activities
  • 3
    Application: Submit through myPATH by December 1 deadline
  • 4
    Optimization: Develop strategy to maximize both federal and state benefits

Questions?

Contact our R&D credit specialists to explore your Pennsylvania opportunities.

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