Investment Tax Credit

Your corporation may earn the credit for the purchase or lease of qualifying tangible property. Learn if you qualify.

Overview

The investment tax credit (ITC) may be available to certain corporate excise taxpayers in Massachusetts.

To qualify, a corporation must be defined under Massachusetts law as a:

  • Manufacturing corporation
  • Research and development corporation
  • Corporation primarily engaged in agriculture, or
  • Corporation primarily engaged in commercial fishing.

Such corporations may earn a credit for the purchase or lease of “qualifying tangible properties,” which include:

  • Tangible personal property
  • Other tangible property, including
    • Buildings
    • Structural components of buildings acquired by purchase.

During the tax year, the “qualifying tangible properties” must have been:

  • Acquired
  • Constructed
  • Reconstructed, or
  • Erected.

Minimum excise, maximum amount of credits, carryover, and recapture

The ITC may not reduce the corporate excise due below $456. The maximum amount of credits, otherwise allowable to a corporation in any taxable year, may not exceed 50% of its excise.

Any unused credit may be carried forward for 3 tax years after the credit was earned.

The ITC may be recaptured if the eligible property for which the ITC:

  • Is disposed of, or
  • Ceases to be in qualified use prior to the end of its useful life.
    • The useful life is equal to the property’s depreciation period for federal tax purposes.

Additional information

The useful life is equal to the property’s depreciation period for federal tax purposes.

For more information on how the credit amount is calculated, important definitions, and limitations, please see:

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