Senate Bill 711 modernizes the state’s R&E incentives with changes that directly benefit innovators and high‑growth companies:
- ASC now allowed — a simpler, more flexible way to calculate the research credit.
- Indefinite carryforwards — unused credits no longer expire.
- Full deductibility preserved — California does not adopt federal §174/§174A capitalization rules, so both U.S. and foreign R&E remain immediately deductible.
Bottom line:
If you haven’t revisited your California R&D strategy—or if prior methodologies limited your benefit—2025 is the year to take another look. These changes could materially increase both eligibility and credit value.
If you haven’t revisited your California R&D strategy—or if prior methodologies limited your benefit—2025 is the year to take another look. These changes could materially increase both eligibility and credit value.