Key figures
Kansas advisory
2026, with sources
A transferable research credit
Kansas’s R&D credit is 10% of qualified research spending above the company’s three-year average, for tax years beginning after 2022 (it was 6.5% before). The company files Form K-204, the Research and Development Credit Application, before claiming it, and can use no more than 25% of the credit plus carryforward in any one year.
The feature that matters for a startup is transfer. From tax year 2023, a taxpayer with no current Kansas tax liability can transfer a new credit to any person, once and in full, documented on Form K-260 and Schedule K-53. Few states let a pre-revenue company sell a research credit; Kansas does.
Planning around the 2027 apportionment change
HB 2231’s move to single sales factor in 2027 changes the math on where to put people. Until the end of 2026, a Kansas office pulls income into Kansas through the payroll and property factors; from 2027 only Kansas customers do. For a company choosing between Kansas City, Kansas and Kansas City, Missouri for an office, the Kansas side’s corporate cost falls in 2027 if its customers are elsewhere.
Where founders go wrong in Kansas
Kansas changed its rates, its reporting cycle and its apportionment formula within three years, so a setup checklist written in 2023 is wrong on all three.
- Reading the 4% normal rate in older guides; it has been 3.5% since 2024.
- Assuming the SB 269 rate cuts reached corporations; none applied for 2026.
- Letting an unusable R&D credit sit in carryforward instead of transferring it.
- Missing the biennial information report because the calendar still says ‘annual’.
The federal baseline
This page covers what Kansas adds. The federal rules underneath it apply here too.
Common questions
Can a loss-making startup use the Kansas R&D credit?
Yes, in a way most states’ credits are not. Since tax year 2023 a taxpayer with no current Kansas tax liability can transfer a new Kansas R&D credit to another person — the whole credit, once — using Form K-260. For a pre-profit startup that turns the credit into cash at a discount rather than a carryforward it may never use.
How does Kansas tax a founder’s exit?
Kansas computes individual tax from federal adjusted gross income, so a gain excluded federally as QSBS under IRC §1202 generally stays out of Kansas income. Taxable gain is taxed at Kansas’s 5.2% and 5.58% rates for a resident.
Advisory next door
- NENebraska advisoryNebraska’s Angel Investment Tax Credit gives investors a refundable credit for backing small Nebraska tech companies. Personal and corporate rates are falling to 4.55% in 2026.
- MOMissouri advisoryMissouri’s research credit is capped and allocated by the Department of Economic Development. Since 2025, individuals pay no Missouri tax on capital gains.
- OKOklahoma advisoryOklahoma’s incentives are targeted programs rather than a broad R&D credit, and its three-factor formula makes office location a corporate tax decision.
- COColorado advisoryNo statewide R&D credit, only the Enterprise Zone program. QSBS follows the federal rule. Most mistakes happen at the city level, in Denver especially.
Founder guides on this
- R&D taxThe R&D tax credit and Section 174A for startupsEngineering salaries can earn a federal R&D credit against payroll tax, and Section 174A lets you deduct US research again. What qualifies, what to track.
- EquityStock options, 409A valuations and vesting for startupsHow option strike prices are set by a 409A valuation, how vesting and the cliff work, and why ASC 718 makes every grant an expense on your P&L.
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
More of the Kansas guide
- AccountingAccounting and state tax in KansasCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in KansasSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in KansasPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in KansasWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in KansasRegistering to do business, annual reports, franchise tax and the filing calendar
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.