California SB 711 adopts a federal-style Alternative Simplified Credit for the state R&D credit (3% of qualified research expenses above a fixed base), removing the 1980s fixed-base-percentage hurdle that disqualified many young companies. Unused credits now carry forward indefinitely, up from 15 years. It applies to tax years beginning Jan 1, 2025, on returns filed in 2026.
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California SB 711 opens the state R&D credit to startups via ASC method
Why this matters for founders
California startups that lacked the historical data to claim the old credit can now use the ASC method on 2025 returns; have your CPA re-check R&D credit eligibility this filing season.
Source: Cherry Bekaert
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