Research Credit

Learn about the credit available to taxpayers who have qualified research expenses.

Overview

Research Credit may be available to business corporations subject to the corporate excise that incurred “Massachusetts qualified research expenses” in Massachusetts.

The credit closely parallels the federal research credit.

Generally, “Massachusetts qualified research expenses” include:

  • Wages paid to employees
  • A portion of wages paid to contractors
  • Amounts paid for supplies.

The credit is only applicable if:

  • The services were performed for research purposes and
  • The supplies were used to conduct research in Massachusetts.

Minimum excise, maximum amount of credits, and carryover

The Massachusetts Research Credit may not reduce a taxpayer’s liability below $456.

The credit amount is limited to:

  • The first $25,000 of corporate excise due, plus
  • 75% of any excise due in excess of $25,000.

If unused credits exceed these limitations, they can be:

  • Carried over to future tax years
  • Applied against the corporate excise.

Credits in excess of the taxpayer’s liability may be carried over for 15 years. Credits disallowed because of the 75% rule may be carried over indefinitely.

Additional information

For more information on definitions, limitations, and how the credit is calculated:

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