Massachusetts offers a tax incentive for research and development investment for both manufacturers and R&D companies. This tax incentive was designed to remove any obstacles to R&D investment and spur growth and innovation throughout the Commonwealth. The R&D tax credit closely resembles the federal credit program, however, it specifically offers qualifying Massachusetts companies many unique features for doing business in Massachusetts.
- The R&D tax credit is available to any foreign or domestic corporation subject to the corporate excise under Chapter 63 Massachusetts Law
Terms and Conditions
- The Massachusetts R&D Tax Credit is divided into two categories.
- The first credit category is a ten-percent credit designed for Qualified Expenses which are defined as any research expense incurred which would qualify for the Federal R&D tax credit.
- The second credit category is a fifteen-percent credit available to Basic Research Payments for any costs related to donations and contributions made to research organizations such as hospitals and universities.
- Unlike many other states, the Massachusetts R&D tax credit is permanent.
- The R&D tax credit can be taken in conjunction with the state's Investment Tax Credit of three-percent (or five-percent as part of the Economic Development Incentive Program).
- The R&D tax credit may reduce the corporation's tax to the minimum tax of $456.
- MGL Chapter 63, section 38M
- Technical Information Release TIF 04-15
Massachusetts Office of Business Development
10 Park Plaza, Suite 3730
Boston, MA 02116