The Texas entry, field by field
This is the registry entry our engine applies for tax year 2026, rendered field by field. Where a field is blank in the registry, the row says so rather than filling the gap.
Program flags on this entry
- Tax base
- franchise
- Partially refundable no tax due
- Yes
- Credit for TY2026
- Current credit Yes. Our rules registry carries a current Texas research credit for tax year 2026.
- Structure
- Incremental: the credit applies to qualified research expenses above a state base amount
- Credit rate
- 8.722% of qualified research expenses above the base amount
- Higher rate
- 10.903% The higher rate applies where the taxable entity contracts with a Texas public or private institution of higher education (Tex. Tax Code ch. 171 subch. T); otherwise the standard rate applies. Which one governs turns on facts the study establishes.
- Fallback rate (no prior-period spend)
- 4.361% of all current-period qualified research expenses, or 5.451% at the alternative rate Applies when the taxpayer had no state qualified research expenses in one or more of the statutory preceding periods. The headline incremental rate on a zero base would pay double the statutory credit, so the registry carries the fallback instead.
- Base method
- The base amount is the formula Texas's own statute prescribes, not the federal §41(c) fixed-base computation. The registry does not carry a written description of that formula for this state, so the study establishes it against the statute cited below.
- Liability limit
- 50% of the applicable tax liability Tax liability sits outside the study, so this is a preparer determination at filing time, not something the study computes.
- Carryforward
- 20 years
- Carryback
- None recorded
- Refundable?
- Partially refundable the registry records refundability only for an entity with no tax due.
- State form
- Form 05-178
- Statute
- Tex. Tax Code ch. 171 subch. T (S.B. 2206; reports due on/after 1/1/2026)
How the Texas credit is computed
The Texas credit is incremental: it applies to the qualified research expenses that exceed a state base amount, not to the whole year's spending. The registry carries a rate of 8.722%.
The base amount is the formula Texas's own statute prescribes, not the federal §41(c) fixed-base computation. The registry does not carry a written description of that formula for this state, so the study establishes it against the statute cited below. Where a statutory preceding period has no Texas qualified research expenses at all, the registry replaces the increment with a flat 4.361% of current-period expenses rather than applying the headline rate to a zero base.
On limits, the amount used in a year is limited to 50% of the applicable tax liability. Unused credit carries forward 20 years. Refundability: partially refundable - the registry records refundability only for an entity with no tax due.
Ricerca computes the Texas figure from the same substantiated expense base as the federal §41 credit, using the registry entry for the tax year claimed and applying the state's own qualification rules to it. Where the registry is silent on a point, the study says so and the position is resolved with the return preparer instead of being assumed.
What changed for TY2026
The registry carries a separate Texas entry for each regime, so a study for TY2025 and a study for TY2026 are computed under different rules. These are the fields that differ.
| Field | TY2025 | TY2026 |
|---|---|---|
| Second statutory rateSecond statutory rate changed between the two regimes. | 6.25% | 10.903% |
| Credit rateCredit rate changed between the two regimes. | 5% | 8.722% |
| RefundableThe registry records the credit as refundable for TY2026, on the terms the "Refundable?" row above records; it did not for TY2025. | No | Yes |
| Fallback rate (alternative)Fallback rate (alternative) changed between the two regimes. | 3.125% | 5.451% |
| Fallback rateFallback rate changed between the two regimes. | 2.5% | 4.361% |
| Registry flagsThe registry flags carried on this state changed. | Tax base; Wages in state | Partially refundable no tax due; Tax base |
| Refundable percentageThe share of excess credit the registry records as refundable changed. | 0% | 100% |
| StatuteThe governing citation the registry carries for TY2026 is not the one it carries for TY2025. | Tex. Tax Code §171.651-.665 (franchise-tax R&D credit) | Tex. Tax Code ch. 171 subch. T (S.B. 2206; reports due on/after 1/1/2026) |
| Registry regime versionThe registry moves Texas onto a new regime entry for TY2026. | 2024.1 | 2026.1 |
Claiming it alongside the federal credit
The federal §41 credit comes first. It is computed from the qualified research expenses the study substantiates - wages for qualified services, supplies consumed in research, computer and cloud rental, and the allowable share of contract research - and it lands on Form 6765 with the return.
The Texas credit is then computed from that same substantiated base, with the state's own rules applied on top: its rate, its base amount, its caps, and its own view of what counts. Where the work was physically performed matters: state credits generally reach the research done in the state, so the same employee can sit inside one state's base and outside another's.
That is why the allocation work is done once, at the expense level, with the state attribution recorded as it is built rather than reverse-engineered at filing time.
One base, two computations
- 1 Qualify the activities under the four-part test and total the year's QREs.
- 2 Compute the federal §41 credit and file it on Form 6765.
- 3 Apply the Texas entry above to the Texas share of that base, and file it on Form 05-178.
Sources
The citations below are carried verbatim on the Texas registry entry. They are what the study cites, and what a reviewer can check.
- Statute
- Tex. Tax Code ch. 171 subch. T (S.B. 2206; reports due on/after 1/1/2026)
- Form
- Form 05-178
Registry entry version 2026.1, exported from services/study-api/app/engines/rules_engine.py (STATE_RULES_2024 + STATE_RULES_REGIME_OVERRIDES via RulesEngine.get_state_rules) on September 10, 2026. The registry is versioned per state and per tax year: the entry above governs TY2026, and a study for an earlier year is computed under that year's entry instead.