National AI Funding Directory
AI Funding Source Finder
The only comprehensive 50-state directory of federal grants, tax credits, and state programs for companies investing in AI. Most mid-market companies qualify for 2–3 programs and can offset 30–40% of total project costs without giving up equity, taking on debt, or waiting 18 months for a grant decision.
$3.3B
Federal AI R&D funding, FY2025
NITRD, 2025
$17B
R&D tax credits claimed annually
Bloomberg Tax, 2024
6-10%
Returned on qualified AI expenses
Burkland Associates, 2025
55%
of small businesses now use AI
Thryv, 2025
How to Use This Guide
Start with Federal Tax Credits to understand the R&D credit (the biggest single opportunity). Then check Find Your State for your state’s R&D credit and local programs. Use the Funding Strategy section to stack sources for maximum offset, and check off the action items as you go. Need help navigating these programs? An AI Strategy Assessment produces the roadmap that unlocks multiple funding streams, or AI workshops qualify for state workforce grants like Going PRO.
Free Download
Get the AI Funding Action Kit
Four printable worksheets: eligibility decision tree, R&D credit documentation starter, CPA briefing template, and 90-day funding action plan.
01—Federal Tax Credits
The Biggest Opportunity Most Companies Miss
Over $17 billion in R&D credits are claimed annually. Companies typically save 6–10% of qualified R&D expenses as a dollar-for-dollar reduction in tax liability. You don’t need a lab.
Dollar-for-dollar reduction in tax liability for qualified research expenses. Statutory credit rates are 20% (Regular Credit) or 14% (Alternative Simplified Credit) of qualified expenses above a base amount, but most companies see an effective benefit of 6-10% of total qualified spend. The IRS Four-Part Test requires: permitted purpose, technological uncertainty, process of experimentation, and technological in nature. Most custom AI development qualifies. Startups under $5M gross receipts with no more than 5 tax years of gross receipts can apply up to $500K/year against payroll taxes.
Eligibility
Any U.S. business with qualifying R&D activities
How to claim: Claim on Form 6765 with your annual tax return. Consult your CPA.
OBBBA (July 2025) restored immediate deduction for domestic R&D expenses. Previously required 5-year amortization under TCJA. Retroactive for companies under $31M average gross receipts. Full deduction in Year 1 instead of spreading over 5 years.
Eligibility
Companies under $31M average gross receipts (retroactive claims)
Deadline
July 6, 2026 (hard deadline); ~April 2026 for early 2022 filers
How to claim: Amend 2022-2024 returns. Hard deadline July 6, 2026.
Restored permanently by OBBBA. Full first-year deduction on new and used equipment, software, and AI hardware (GPUs, servers, edge devices). Was phasing down to 60% in 2024 before restoration. No cap on amount.
Eligibility
Any business placing qualifying equipment/software in service
How to claim: Claim on your tax return for the year equipment is placed in service.
Doubled to $2.5M by OBBBA (was $1.22M in 2024). Deduct the full cost of qualifying equipment and software purchases in the year placed in service. Phase-out begins at $4M total spending (was $3.05M in 2024). Covers AI hardware, GPUs, servers, and software.
Eligibility
Any business purchasing qualifying equipment/software
How to claim: Claim on Form 4562 with your annual tax return.
Ready to document your R&D credit claim? The AI Funding Action Kit includes a fill-in IRS Four-Part Test worksheet and activity log template.
Get the Action Kit →02—Federal Programs
Grants, Loans & Pending Legislation
Phase I: up to $314K (feasibility). Phase II: up to $2.1M (development). AI topics across multiple agencies. Authorization expired September 2025. Senate reform bill pending. House passed clean extension.
Amount
$314K Phase I, $2.1M Phase II
Eligibility
U.S. small businesses, under 500 employees
How to Access
Authorization expired Sept 2025. Prepare docs now for when solicitations reopen.
Deadline: TBD 2026 (awaiting reauthorization)
$25M awarded through Good Jobs Challenge for regional workforce training in critical technologies including AI (Jan 2025). Future AI-specific NOFOs possible.
Amount
$25M total pool
Eligibility
Regional consortia (indirect access for businesses)
How to Access
Jan 2025 awards delivered. Watch eda.gov for future AI-specific opportunities.
$220M FY2025 round (closed Feb 18, 2026). Restricted to 19 pre-designated consortia. New open-competition NOFO expected 2026.
Amount
$220M (FY2025 round)
Eligibility
Designated consortia only (current round)
How to Access
New open-competition round expected 2026. Track announcements.
https://www.eda.gov/funding/programs/regional-technology-and-innovation-hubs
$3.19M awarded to 8 businesses for AI, biotech, and semiconductor projects (Feb 2026). Ongoing rounds expected.
Amount
Varies per award (avg ~$400K)
Eligibility
Small businesses with AI/tech focus
How to Access
Track NIST SBIR for future rounds.
https://www.nist.gov/tpo/small-business-innovation-research-program
Free or subsidized consulting, Industry 4.0 assessments, and implementation support for manufacturers. Available in all 50 states. Federal funding faces uncertainty under current administration.
Amount
Free or subsidized services
Eligibility
Manufacturers under 500 employees
How to Access
Find your state center at nist.gov/mep. Act soon: federal funding threatened.
DOL 2025 guidance explicitly encourages AI skills training. Access through local American Job Centers. Available in every state.
Amount
Varies by state and local area
Eligibility
Any business for employee upskilling
How to Access
Contact your local American Job Center.
General business loans up to $5M. Can fund AI hardware, software, and consulting. Government guarantees 75-85% of loan.
Amount
Up to $5M
Eligibility
Small businesses per SBA size standards
How to Access
Apply through an SBA-approved lender.
Long-term fixed-rate financing for major equipment and real estate. Covers AI infrastructure, data center equipment.
Amount
Varies (long-term fixed rate)
Eligibility
Tangible net worth under $20M, avg net income under $6.5M
How to Access
Apply through a Certified Development Company (CDC).
Revolving credit for small manufacturers (NAICS 31-33). Up to $5M working capital for technology adoption, including AI. Launched October 2025.
Amount
Up to $5M
Eligibility
Small manufacturers
How to Access
Through SBA-approved lenders.
Chief Digital & AI Office funds AI projects through defense contracts and SBIR topics. Tradewinds marketplace for rapid AI prototyping.
Amount
Varies by contract
Eligibility
Defense contractors and cleared small businesses
How to Access
Track opportunities at sam.gov and Tradewinds.
Advanced research projects with AI focus areas. BAAs posted regularly. High-risk, high-reward.
Amount
Varies by BAA
Eligibility
Organizations with advanced technical capability
How to Access
Track BAAs at sam.gov. Technical capability required.
Health-focused advanced research. AI applications in diagnostics, drug discovery, and clinical operations.
Amount
Varies by program
Eligibility
Healthcare AI companies and researchers
How to Access
Track open programs at arpa-h.gov.
$52B for semiconductor manufacturing. Relevant for AI hardware supply chain companies.
Amount
$52B total allocation
Eligibility
Semiconductor and AI chip companies
How to Access
Focus on semiconductor manufacturing and supply chain.
Rural Business Development Grants and Business & Industry loans. AI applications in agriculture and food processing.
Amount
Varies by program
Eligibility
Rural businesses
How to Access
Check rd.usda.gov for current opportunities.
Creates SBA-distributed AI training resources and a new grant program for training providers. Reintroduced Feb 2026 (Cantwell-Moran). Previous version passed Senate Commerce Committee in 2024 Congress.
Amount
TBD (if enacted)
Eligibility
Small businesses (if enacted)
How to Access
Reintroduced Feb 2026. Previous version passed committee in 2024 but died when Congress ended.
Would create SBA AI advisory program for small businesses. Targeted counseling and technical assistance. Passed House 395-14 in bipartisan vote.
Amount
TBD (if enacted)
Eligibility
Small businesses (if enacted)
How to Access
Passed House 395-14. Awaits Senate action.
Would establish National AI Research Resource (NAIRR) with shared compute and data access for researchers and small businesses. Bipartisan support. Pilot program active.
Amount
TBD (if enacted)
Eligibility
Researchers and small businesses (if enacted)
How to Access
Bipartisan support. Pilot program already active.
Would require domestic companies to have right-of-first-refusal on advanced AI chips before export to countries of concern. Bipartisan bill focused on maintaining U.S. AI chip leadership.
Amount
TBD (if enacted)
Eligibility
AI chip and semiconductor companies (if enacted)
How to Access
Bipartisan. Focused on AI chip supply chain and export policy.
Federal grants move slowly. Six to eighteen months from application to funding is typical. Pending legislation may or may not become law. If you need to offset costs now, start with R&D tax credits and state workforce programs.
Not sure which programs fit your company?
I help mid-market companies identify which programs they qualify for and stack multiple sources for maximum offset. 30-minute call, no pitch.
03—Find Your State
50-State R&D Credit & Programs Directory
State R&D credits stack with the federal Section 41 credit. Refundable credits pay cash even if you owe no state tax. Select your state below or browse the full directory.
| State | Credit Rate | Refundable | Key Feature |
|---|---|---|---|
| Alabama | None | No | No state R&D tax credit. Alabama Jobs Act provides a 5% capital investment credit and AIDT offers free workforce training. |
| Alaska | 18% | No | 18% of the federal credit. Non-refundable. 20-year carryforward with 1-year carryback. |
| Arizona | 24% (first $2.5M); 15% (above) | Partial | Refundable for companies under 150 employees. $100K annual refundable cap. $5M statewide refundable cap. 15-year carry. |
| Arkansas | 20% | No | In-house research expenses. 9-year carryforward. |
| CaliforniaNew | 15% (excess QREs); 24% (basic research); 3% (new ASC) | No | 15% of excess QREs over base + 24% of basic research payments. New ASC method (3%) available 2025+. No sunset. Unlimited carryforward. |
| Colorado | 3% | No | Enterprise zone enhanced rate available. Carryforward allowed. |
| Connecticut | 20% | Yes | Fully refundable at 65% of earned credit. Strong program for startups. |
| Delaware | 10% | Yes | 10% standard, 20% for small businesses (<$20M gross receipts). Fully refundable. |
| Florida | 10% | No | 10% of excess over base period. Annual $9M statewide cap. |
| Georgia | 10% | No | 10% of qualified expenses. 5-year carryforward (2025+). Must claim federal credit first. |
| Hawaii | 20% | Yes | 20% of QREs. Fully refundable. $5M statewide annual cap. Sunsets 12/31/2029. |
| Idaho | 5% | No | 5% of qualified expenses. 14-year carryforward. |
| Illinois | 6.5% | No | 6.5% of qualifying expenses. 5-year carryforward. Partners with federal definitions. |
| Indiana | 15% (first $1M); 10% (above) | No | 15% first $1M, 10% over. 10-year carryforward. Strong mid-market support. |
| Iowa | 6.5% | Partial | Current 6.5% rate through TY2025. Restructured for 2026+ (3.5%, competitive, $40M cap). |
| Kansas | 10% | No | 10% of qualified expenses (increased 2023). Indefinite carryforward, limited to 25% utilization per year. |
| Kentucky | 5% | No | 5% of qualified research FACILITY costs (construction, remodeling, equipping). Not a general R&D expense credit. 10-year carryforward. |
| Louisiana | 30% (<50 employees); 10% (50-99); 5% (100+) | No | Rates based on employee count, not QRE amount. Non-refundable since 2015. $12M annual statewide cap (eff. July 2025). 5-year carryforward. |
| Maine | 5% | No | 5% of excess QREs over base + 7.5% basic research. Non-refundable. 15-year carryforward. |
| Maryland | 3% (basic); 10% (growth) | Yes | 3% basic credit (QREs up to base), 10% growth credit (excess over base). Refundable for small businesses (assets <$5M). $12M annual cap. |
| Massachusetts | 10% | No | 10% of excess QREs + 15% basic research. Non-refundable (refundable option via Life Sciences program only). 15-year carryforward. |
| MichiganNew | 3% (base); 10-15% (excess over base) | Yes | NEW for TY 2025+. Fully refundable. 3% base, 10% large biz / 15% small biz on excess. $100M statewide cap. First filing Apr 1, 2026. |
| MinnesotaNew | 10% | Partial | Partial refundability added 2025 (19.2% of unused credit). 10% of first $2M QRE, 4% above. |
| Mississippi | $1K/employee/year (R&D Skills); 25% (university SMART) | No | Two programs: $1,000/year per new R&D employee for 5 years, plus 25% SMART rebate for university-partnered research ($1M cap). |
| Missouri | 15% (20% university) | No | 15% of additional QREs (20% with MO college/university). $300K per-taxpayer cap. $10M annual statewide cap. Expires 12/31/2028. |
| Montana | None | No | R&D tax credit expired December 31, 2010. Federal credit still applies. |
| Nebraska | 15% of federal credit (35% for university) | Yes | 15% of federal R&D credit for off-campus research. 35% for on-campus/university research. Refundable. |
| Nevada | None | No | No state income tax. No R&D credit. Federal credit still applies. Knowledge Fund available. |
| New Hampshire | 10% | No | 10% of excess QREs over base. $50K per-taxpayer annual cap. $7M statewide cap. Against BPT. 5-year carryforward. |
| New Jersey | 10% | Yes | 10% of excess QREs. Base credit nonrefundable. Tech companies (<225 employees) can sell unused credits via Certificate Transfer program (up to $20M lifetime). |
| New Mexico | 5-10% | No | 5% additional for small businesses. Higher rate in rural areas. 3-year carryforward. |
| New York | 6% (Excelsior); 9% (QETC); 15-20% (Life Sciences) | Yes | Multiple programs: Excelsior (6% QREs), QETC (9% for qualifying emerging tech), Life Sciences (15-20%). Excelsior is refundable. |
| North Carolina | None | No | R&D credit expired 2015. Check Article 3J credits and county-level programs. |
| North Dakota | 25% | No | 25% on first $100K excess QREs, 8% above $100K. 15-year carryforward with 3-year carryback. |
| Ohio | 7% | No | 7% of excess over base period. Applied against CAT. 7-year carry. |
| Oklahoma | 5% rebate | No | 5% rebate program (cash, not credit). $20M annual statewide cap. First-come, first-served. No carryforward. |
| Oregon | ~15% (semiconductor only) | Partial | General R&D credit expired 2017. Semiconductor-only credit at ~15% of QREs, $4M/year cap, through 2029. |
| Pennsylvania | 10% | Partial | Partially refundable for small businesses. Annual $60M statewide cap ($12M small business set-aside). |
| Rhode Island | 22.5% | No | 22.5% of first $111K, 16.9% above. Non-refundable. 7-year carryforward. Limited to 50% of tax due. |
| South Carolina | 5% | No | 5% of qualified expenses. 10-year carryforward. |
| South Dakota | None | No | No state income tax. No R&D credit. Federal credit still applies. |
| Tennessee | None | No | No broad R&D credit. Check FastTrack Infrastructure grants and TEP fund. |
| TexasNew | 8.722% (10.903% university) | Partial | Enhanced by SB 2206 (June 2025). 8.722% of excess QREs against franchise tax. Partially refundable for entities with no franchise tax liability. 20-year carryforward. |
| Utah | 7.5% (volume); 5% (incremental); 5% (basic research) | No | 7.5% volume credit (no carryforward), 5% incremental + 5% basic research (14-year carryforward). |
| Vermont | 27% of federal credit | No | Simplest calculation: 27% of your Section 41 amount. |
| Virginia | None (expired 2025) | No | R&D credit expired January 1, 2025. HB 1969 to extend failed. Federal credit still applies. |
| Washington | None | No | No state income tax. No R&D credit. B&O tax credit for rural counties only. Federal credit applies. |
| West Virginia | None (expired 2013) | No | R&D tax credit expired 2013. Sales tax exemption for R&D equipment remains. Federal credit still applies. |
| Wisconsin | 5.75-11.5% | Partial | Tiered: 5.75% general, up to 11.5% for specific R&D types. 25% refundable since 2024. 15-year carryforward on non-refundable portion. |
| Wyoming | None | No | No state income tax. No R&D credit. Federal credit still applies. |
| Washington DC | None | No | No R&D tax credit. QHTC program offers reduced tax rates for qualifying high-tech companies. Federal credit still applies. |
Click any state row to see full details and available programs.
04—Michigan Spotlight
Michigan’s AI Funding Landscape
Michigan has one of the strongest AI funding landscapes in the country. A new fully refundable R&D tax credit, the Going PRO Talent Fund, and multiple manufacturing programs make this a particularly good time for Michigan companies to invest in AI.
Going PRO Talent Fund
$55M+ annual poolAI training is explicitly eligible. FY2026 Cycle 1 funded 449 businesses statewide. Covers specific technical skills training (not generic AI literacy). Structured AI training workshops can meet Going PRO skills-based requirements, so your team gets trained and the fund offsets the cost. Apply through your local Michigan Works! office.
MI Hub for Manufacturers
$17M in grants and loansOnline platform connecting manufacturers to grants and loans across multiple state programs. Launched June 2025. A good starting point if you’re not sure what you qualify for. Create an account, answer a few questions, and the platform matches you to eligible programs.
MMTC Free I4.0 Assessment
FreeZero-cost technology assessment covering AI, robotics, cybersecurity, and IoT readiness. Expert evaluation of your operation with no obligation. Part of the national MEP network. Schedule sooner rather than later: federal MEP funding faces uncertainty under the current administration.
MEDC Industry 4.0 Grant
$6M total (exhausted)Reimbursed 50% of qualifying tech costs up to $25K per company. Funded 185 manufacturers across the state. The $6M allocation is fully exhausted. Future rounds are possible but not confirmed. Contact your regional I4.0 administrator for updates.
Michigan R&D Tax Credit (NEW)
3% base; 10-15% on excess (fully refundable)Brand new for tax year 2025+. Michigan’s first R&D tax credit in over a decade. Fully refundable with a 3% base rate, 10% on excess for large businesses (250+ employees, max $2M/year), and 15% on excess for small businesses (under 250 employees, max $250K/year). 5% bonus for university collaboration. $100M statewide cap. Stacks with the federal Section 41 credit and Going PRO training funds. First filing opportunity begins April 1, 2026.
Regional I4.0 Administrators
05—Funding Strategy
4-Step Funding Stack for AI Projects
Scope It
MEP free assessment or AI Strategy Assessment. Produces the roadmap other applications require.
$0 – subsidized
Train the Team
Going PRO, WIOA, or your state’s workforce program. Cover training costs before you build.
$2K–$8K covered
Build the AI
Claim R&D Tax Credit (Sec. 41) on custom development, integration, and testing work.
6–10% back
Deduct & Depreciate
Sec. 174 immediate expensing + 100% bonus depreciation on equipment and software.
Full Year 1
Combined Offset on a Typical AI Project
No equity, no debt, no 18-month grant wait
30–40%
For a deeper walkthrough of each funding mechanism and how to sequence them, read How to Fund AI Adoption: Grants, Tax Credits, Programs. A Fractional AI Director can manage the entire funding stack alongside your AI implementation.
Put this strategy on a timeline. The AI Funding Action Kit includes a 90-day funding plan with weekly milestones and a CPA briefing template.
Download the Action Kit →2026 Key Dates & Deadlines
Statute of limitations for 2022 returns filed on time without extension. Amend now to claim immediate R&D expensing retroactively.
First filing opportunity for Michigan new fully refundable R&D tax credit (TY 2025+). Talk to your CPA about qualification.
Michigan FY2026 Cycle 2 application window. Estimated spring 2026 based on prior year timing. Confirm dates through your local Michigan Works! office.
Last day to amend 2022-2024 returns for immediate R&D expensing. Companies under $31M avg gross receipts eligible.
Senate action pending. House passed clean extension. Prepare documentation so you are ready when solicitations reopen.
New open-competition NOFO expected. Previous round was $220M restricted to 19 consortia.
Jan 2025 awards delivered. Watch eda.gov for future AI-specific workforce training opportunities.
Most state workforce and technology grants operate on fiscal year cycles. Check your state deadlines regularly.
Available now in all 50 states. Schedule sooner rather than later: federal funding faces uncertainty.
Funding Action Checklist
0 of 10 complete06—Download Tools
You’ve identified the programs. Now claim them.
The AI Funding Action Kit gives you the fill-in worksheets, CPA briefing template, and 90-day plan to turn this research into actual tax credits and grants. Five printable pages: an eligibility decision tree, your funding profile with a dollar estimator, the IRS Four-Part Test documentation starter, a ready-made CPA briefing with pre-written questions, and a 90-day action plan with weekly milestones.
Get the AI Funding Action Kit
Enter your name and email and we'll send it right over. You'll also get a short follow-up sequence with tips on documenting your R&D credit claim and briefing your CPA.
Disclaimer: This directory is for informational purposes only and doesn’t constitute tax, legal, or financial advice. Program details, eligibility requirements, and deadlines change frequently. Consult a qualified CPA or tax advisor before making R&D credit claims or amending returns. Consult program administrators directly before applying for grants. Information is current as of February 2026. Jonathan Lasley AI Advisory has no affiliation with any government program listed in this directory.
07—FAQ
Common Questions About AI Funding
Several federal programs fund AI projects. The SBIR/STTR program provides up to $2.1M for small business AI research (currently lapsed but expected to reauthorize in 2026). The MEP Network offers free manufacturing technology assessments in all 50 states. WIOA workforce funds now explicitly cover AI skills training. Sector-specific programs through DOD, DARPA, ARPA-H, and USDA also fund AI work in their domains. SBA 7(a) and 504 loans can finance AI hardware, software, and consulting at subsidized rates.
Yes, and it’s the single largest funding opportunity most companies miss. The federal R&D tax credit (Section 41) returns 6–10% of qualified AI expenses as a dollar-for-dollar tax reduction. Custom model development, data pipeline engineering, integration testing, and algorithm design all qualify. Off-the-shelf SaaS subscriptions and basic prompt engineering don’t. Your CPA can help determine which AI work meets the IRS Four-Part Test. Companies with gross receipts under $5M and no more than 5 tax years of gross receipts can apply up to $500K per year against payroll taxes instead of income tax.
Yes. Beyond the R&D tax credit’s payroll tax offset for companies under $5M in gross receipts, small businesses can access the MEP Network (free assessments for manufacturers), WIOA workforce training funds (AI-eligible through American Job Centers), and state-level programs like Going PRO in Michigan, TechCred in Ohio, and Skills Development in Texas. The AI for Main Street Act passed the House 395-14 and would create SBA-funded AI resources if the Senate passes it. The Small Business AI Training Act was reintroduced in February 2026. SBA 7(a) loans up to $5M can also fund AI projects at subsidized rates.
Most states offer some combination of R&D tax credits, workforce training grants, and technology innovation programs. As of 2026, 40+ states have R&D tax credits that stack with the federal credit. Several states offer refundable or partially refundable credits that pay cash even without full tax liability (Connecticut, Hawaii, Michigan, Delaware, Iowa, and others). State workforce programs like Going PRO (Michigan), TechCred (Ohio), and Skills Development (Texas) fund AI training. Innovation grants range from $75K (Iowa Manufacturing 4.0) to $500K (Maryland Cyber/AI Clinic, Pennsylvania Ben Franklin Tech).
Most mid-market companies can realistically offset 30–40% of their AI project costs by stacking multiple sources. The R&D tax credit alone returns 6–10% of qualified expenses. Adding a state R&D credit (3–30% depending on your state), workforce training grants ($2K–$8K), and immediate expensing provisions (Section 174, 100% bonus depreciation, Section 179 up to $2.5M) creates a significant combined offset. None of these require giving up equity, taking on debt, or waiting 18 months for a grant decision. The key is documenting your AI work properly and pursuing them in the right order.
Follow a four-step process: (1) Scope your AI project with a free MEP assessment or AI Strategy Assessment, which produces the roadmap that other applications require. (2) Apply for workforce training grants to cover team upskilling costs before building. (3) Claim the federal and state R&D tax credits on your custom development work. (4) Use Section 174 immediate expensing and 100% bonus depreciation to deduct equipment and R&D costs in Year 1. These sources don’t conflict with each other and can run in parallel. Start with the R&D tax credit and state workforce programs since they move fastest.
Ready to Fund Your AI Initiative?
Every dollar you recoup through grants, tax credits, and workforce programs is a dollar that goes further in your AI implementation. Read the companion guide to funding AI adoption for step-by-step strategy, or start with an AI Strategy Assessment to scope your project and unlock multiple funding streams with a single deliverable.
30 minutes. No pitch. Just clarity on which programs fit your company.