Details of Public Law 117-169, section 13902 , Increase in Research Credit Against Payroll Tax for Small Businesses

Under the PITL and CTL, California generally conforms to the federal research credit as of the specified date of 1/1/2015, with modifications. California modifies the general credit to be 15 percent of qualified expenses (instead of the federal rate of 20 percent of qualified expenses) and modifies the university “basic research” credit to be 24 percent of qualified expenses (instead of the federal rate of 20 percent of qualified expenses). Qualified research and basic research include only research conducted in California. California specifically does not conform to the alternative simplified credit. Instead, California conforms to the former federal alternative incremental credit, with modifications. FTB does not conform to the election to apply research credit against payroll taxes. Additionally, FTB does not administer payroll taxes.