2.600
2.600 Credits Against Tax
Tax Expenditure Name
Tax Expenditure Number
FY2017
FY2018
FY2019
FY2020
FY2021
Credits Against Tax
2.600
538.1
563.8
609.1
650.0
680.3
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Tax Item
Description
Origin
FY2021
2.602
Investment Tax Credit
Investment Tax Credit
Manufacturing corporations and corporations engaged primarily in research and development, agriculture or commercial fishing are allowed to take a credit of 3% of the cost or other basis for federal income tax purposes of qualifying tangible property acquired, constructed, reconstructed, or erected during the taxable year, after deduction of any federally authorized tax credit taken with respect to such property. Such property must have a useful life of four years or more. The property must be used and located in Massachusetts on the last day of the taxable year. A corporation cannot take the credit on property which it leases to another. A corporation can take the credit on property which it leases from another (for property leased and placed in service on or after July 1, 1994). Generally, eligible corporate lessees making qualifying leasehold improvements may claim the credit. A corporation may carry over to the next succeeding 3 years any unused portion of its Investment Tax Credit (ITC). The credit is neither transferable nor refundable.
M.G.L. c. 63, § 31A (i), (j)
65.0
2.603
Vanpool Credit
Vanpool Credit
Domestic and foreign corporations are allowed to take a credit of 30% of the cost incurred during the taxable year for the purchase or lease of company shuttle vans used in the Commonwealth as part of an employer-sponsored ridesharing program. The shuttle vans must be used for transporting employees. This credit is neither transferable nor refundable, and cannot be carried forward.
M.G.L. c. 63, § 31E
Negligible
2.604
Research Credit
Research Credit
A credit is allowed for corporations which made basic research payments and/or incurred qualified research expenses conducted in Massachusetts during the taxable year. A corporation taking the research credit is limited in the amount that can be taken against the excise in any year. The credit cannot reduce the tax to less than $456. The amount of credit is equal to: 100% of the first $25,000 of excise; and 75% of any amount of excise remaining after the first $25,000. The deduction allowed to a corporation for any research expenses generating a Massachusetts Research Credit must be reduced by the amount of the credit generated. This amount is added back to income. Any corporation which is a member of a combined group may share excess research credits with other members of the combined group. Corporations which are members of a controlled group or which are under common control with any trade or business (whether or not incorporated) are treated as a single taxpayer for purposes of determining the allowable Research Credit. The credit may be carried forward for up to 15 years with certain restrictions, but is neither transferable nor refundable.
As a result of recent legislation, effective for tax years beginning on or after January 1, 2015, a business corporation may elect to calculate its research credit using one of two methods:
The first method revises the existing research credit by changing two definitions that affect the calculation of the credit, i.e., the definitions of "base amount" and "fixed base rate". The "base amount" is now defined as "the product of (i) the average annual gross receipts of the taxpayer for the 4 taxable years preceding the credit year"; and (ii) a 'fixed base ratio'." The "fixed-base ratio" is no longer tied to a corporation's aggregate Massachusetts qualified research expenditures for a fixed 5 year period during the 1980s. It is now defined as "the percentage which the average aggregate qualified research expenses for the taxpayer for the third and fourth taxable years preceding the credit year is of the annual average gross receipts for those years, provided, however, that the fixed base ratio shall not exceed 16 per cent". The amount of the credit is equal to the sum of 10% of the excess, if any, of the qualified research expenses for the taxable year over the base amount plus 15% of the basic research expenses determined under I.R.C. § 41(e)(1)(A).
The second method, which a taxpayer may elect to use in lieu of the method described above, provides for an alternative simplified research credit, which generally conforms to the methodology of the federal alternative simplified credit provided by I.R.C. § 41(c)(5), as amended and in effect for January 1, 2014.
See TIR 14-13 and TIR 14-16 for more information.
As a result of recent legislation, effective for tax years beginning on or after January 1, 2015, a business corporation may elect to calculate its research credit using one of two methods:
The first method revises the existing research credit by changing two definitions that affect the calculation of the credit, i.e., the definitions of "base amount" and "fixed base rate". The "base amount" is now defined as "the product of (i) the average annual gross receipts of the taxpayer for the 4 taxable years preceding the credit year"; and (ii) a 'fixed base ratio'." The "fixed-base ratio" is no longer tied to a corporation's aggregate Massachusetts qualified research expenditures for a fixed 5 year period during the 1980s. It is now defined as "the percentage which the average aggregate qualified research expenses for the taxpayer for the third and fourth taxable years preceding the credit year is of the annual average gross receipts for those years, provided, however, that the fixed base ratio shall not exceed 16 per cent". The amount of the credit is equal to the sum of 10% of the excess, if any, of the qualified research expenses for the taxable year over the base amount plus 15% of the basic research expenses determined under I.R.C. § 41(e)(1)(A).
The second method, which a taxpayer may elect to use in lieu of the method described above, provides for an alternative simplified research credit, which generally conforms to the methodology of the federal alternative simplified credit provided by I.R.C. § 41(c)(5), as amended and in effect for January 1, 2014.
See TIR 14-13 and TIR 14-16 for more information.
303.4
2.605
Economic Development Incentive Program Credit
Economic Development Incentive Program Credit
Under the provisions of the Economic Development Incentive Program (EDIP) established pursuant to M.G.L. c. 23A, the Economic Assistance Coordination Council (EACC) may authorize taxpayers participating in certified projects to claim tax credits under M.G.L. Ch. 62 § 6(g) and M.G.L. Ch. 63 § 38N. To be eligible, a project must be certified by EACC. The total dollar amount of the EDIP credit that may be authorized in a calendar year is $30 million. From 2011 to 2016, the annual cap included amounts awarded pursuant to the certified housing development program authorized by G.L. c. 40V. See item 2.622.
For projects certified prior to January 1, 2010:
The certified project must be in an economic opportunity area and the credit is 5% of the cost of any property that qualified for the investment tax credit (ITC) allowed by G.L. c. 63, § 31A. To qualify for the 5% credit, the property must be used exclusively in a certified project within an economic opportunity area. The credit may be carried forward for up to 10 years or indefinitely with certain restrictions. The credit is neither transferable nor refundable.
For projects certified on or after January 1, 2010 and before January 1, 2017: The EDIP credits must be awarded by the EACC and those credits are no longer limited to 5% of the cost of qualifying property(could be up to 40% of the cost of qualifying property). Further, it was no longer required that all certified projects be in an economic opportunity area. The EDIP credit for certain projects, if authorized by the EACC, may be refundable at the option of the taxpayer. This credit is not transferable.
For job creation projects certified on or after January 1, 2015 and before January 1, 2017:
The EDIP credit provisions have been expanded to include certified job creation projects. Individuals and entities pursuing certified job creation projects may be awarded a credit of up to $1,000 per job created (up to $5,000 is some instances) The total award per project may not exceed $1 million. The credit for a certified job creation project is allowed for the year subsequent to that in which the jobs are created.
For projects certified on or after January 1, 2017:
The amount of credit is determined by the EACC based on factors set out in M.G.L. c. 23A, § 3D. In addition, there are no limitations on the maximum amount of the credit awarded. The EACC may designate the credit as refundable for any certified project (subject to a $5 million limitation per year) and may specify the timing of the refund. For further information, see TIR 16-15. The credit is not transferable.
Finally, "An Act Relative to Economic Development in the Commonwealth" authorizes EACC to establish a program to incentivize businesses to occupy vacant storefronts in downtown areas. Pursuant to this program, the EACC may award up to $500,000 of available EDIP tax credits annually to businesses that occupy previously vacant storefronts. The businesses will not be required to invest in improvements or create new jobs. Rather, the businesses need only commit to occupying the previously vacant storefront for a period of not less than one year. These changes are effective for tax years beginning on or after January 1, 2019. See TIR 18-13 for details.
For projects certified prior to January 1, 2010:
The certified project must be in an economic opportunity area and the credit is 5% of the cost of any property that qualified for the investment tax credit (ITC) allowed by G.L. c. 63, § 31A. To qualify for the 5% credit, the property must be used exclusively in a certified project within an economic opportunity area. The credit may be carried forward for up to 10 years or indefinitely with certain restrictions. The credit is neither transferable nor refundable.
For projects certified on or after January 1, 2010 and before January 1, 2017: The EDIP credits must be awarded by the EACC and those credits are no longer limited to 5% of the cost of qualifying property(could be up to 40% of the cost of qualifying property). Further, it was no longer required that all certified projects be in an economic opportunity area. The EDIP credit for certain projects, if authorized by the EACC, may be refundable at the option of the taxpayer. This credit is not transferable.
For job creation projects certified on or after January 1, 2015 and before January 1, 2017:
The EDIP credit provisions have been expanded to include certified job creation projects. Individuals and entities pursuing certified job creation projects may be awarded a credit of up to $1,000 per job created (up to $5,000 is some instances) The total award per project may not exceed $1 million. The credit for a certified job creation project is allowed for the year subsequent to that in which the jobs are created.
For projects certified on or after January 1, 2017:
The amount of credit is determined by the EACC based on factors set out in M.G.L. c. 23A, § 3D. In addition, there are no limitations on the maximum amount of the credit awarded. The EACC may designate the credit as refundable for any certified project (subject to a $5 million limitation per year) and may specify the timing of the refund. For further information, see TIR 16-15. The credit is not transferable.
Finally, "An Act Relative to Economic Development in the Commonwealth" authorizes EACC to establish a program to incentivize businesses to occupy vacant storefronts in downtown areas. Pursuant to this program, the EACC may award up to $500,000 of available EDIP tax credits annually to businesses that occupy previously vacant storefronts. The businesses will not be required to invest in improvements or create new jobs. Rather, the businesses need only commit to occupying the previously vacant storefront for a period of not less than one year. These changes are effective for tax years beginning on or after January 1, 2019. See TIR 18-13 for details.
M.G.L. c. 63, § 38N
27.7
2.606
Credit for Employing Former Full-Employment Program Participants
Credit for Employing Former Full-Employment Program Participants
Employers who continue to employ former participants of the §110(1) full employment program in non-subsidized positions are eligible to receive a tax credit equal to $100 per month for each month of non-subsidized employment, up to a maximum of $1,200 per employee, per year. For further discussion, see 830 CMR 118.1.
St. 1995, c. 5, § 110(m)
Not Active
2.607
Harbor Maintenance Tax Credit
Harbor Maintenance Tax Credit
Domestic and foreign corporations are allowed to take a credit against the corporate excise for certain harbor maintenance taxes paid to the U.S. Customs Service pursuant to IRC sec. 4461. A corporation is eligible for the credit if the tax paid is attributable to the shipment of break-bulk or containerized cargo by sea and ocean-going vessels through a Massachusetts harbor facility. The credit is not subject to the 50% limitation; however, it may not reduce the tax liability to less than the minimum excise of $456. The credit may be carried forward for up to 5 years, but is neither refundable nor transferable.
1.3
2.608
Brownfields Credit
Brownfields Credit
Taxpayers are allowed to take a credit for amounts expended to rehabilitate contaminated property owned or leased for business purposes and located within an economically distressed area.
Recent legislation extends the Brownfields credit to nonprofit organizations, extends the time frame for eligibility for the credit, and permits the credit to be transferred, sold, or assigned. Under prior law, net response and removal costs incurred by a taxpayer between August 1, 1998 and August 5, 2005, were eligible for the credit provided that the environmental response action before August 5, 2005. As a result of the recent legislation, the environmental response action commencement cut-off date is changed from August 5, 2005 to August 5, 2018, and the time for incurring eligible costs that qualify for the credit is extended to January 1, 2019. See TIR 13-15 for more information. Most recently, Chapter 99 of the Acts of 2018 extended the deadline for "commencement" to August 5, 2013 and set the period for incurring costs to between August 1, 1998 and January 1, 2024.
The credit may be carried forward for up to 5 years. The amount of the credit varies according to the extent of the environmental remedy. If the taxpayer's permanent solution or remedy operation status includes an activity and use limitation, then the amount of the credit is 25% of the net response and removal costs incurred by the taxpayer. However, if there is no activity and use limitation, then the amount of the credit is 50% of the net response and removal costs.
Recent legislation extends the Brownfields credit to nonprofit organizations, extends the time frame for eligibility for the credit, and permits the credit to be transferred, sold, or assigned. Under prior law, net response and removal costs incurred by a taxpayer between August 1, 1998 and August 5, 2005, were eligible for the credit provided that the environmental response action before August 5, 2005. As a result of the recent legislation, the environmental response action commencement cut-off date is changed from August 5, 2005 to August 5, 2018, and the time for incurring eligible costs that qualify for the credit is extended to January 1, 2019. See TIR 13-15 for more information. Most recently, Chapter 99 of the Acts of 2018 extended the deadline for "commencement" to August 5, 2013 and set the period for incurring costs to between August 1, 1998 and January 1, 2024.
The credit may be carried forward for up to 5 years. The amount of the credit varies according to the extent of the environmental remedy. If the taxpayer's permanent solution or remedy operation status includes an activity and use limitation, then the amount of the credit is 25% of the net response and removal costs incurred by the taxpayer. However, if there is no activity and use limitation, then the amount of the credit is 50% of the net response and removal costs.
M.G.L. c. 63, § 38Q
24.9
2.609
Low Income Housing Credit
Low Income Housing Credit
The Low-Income Housing Tax Credit (LIHTC) is administered through the Massachusetts Department of Housing and Community Development (DHCD). The LIHTC is a five year, non-refundable credit available to corporate excise and personal income taxpayers for the construction or development of new low income housing, or the preservation and improvement of existing state or federally-assisted housing. The amount of credit that Massachusetts taxpayers may claim for a qualified Massachusetts project is allocated by the DHCD and is subject to an annual cap of $125 million through 2024, and $50 million thereafter (unless otherwise authorized by DHCD). The LIHTC is not subject to the 50% limitation rule for corporate taxpayers. If the taxpayer disposes of the property generating the LIHTC, a portion of the credit is subject to recapture.
Under prior law, the Massachusetts low-income housing tax credits were available only to taxpayers who had been allocated federal low-incomehousing tax credits. However, effective August 1, 2010, the legislature authorized DHCD to grant state low-income housing tax credits (within the annual cap) to otherwise eligible projects that do not receive a federal low-income housing credit.
The LIHTC is a transferable, non-refundable, five year credit, which may be carried forward for up to 5 years.
Effective January 1, 2017, the LIHTC expanded to also provide a non-refundable, single year tax credit for corporate excise and personal income taxpayers that donate real or personal property to certain non-profit entities for use in purchasing, constructing, or rehabilitating a qualified Massachusetts project. This credit is generally limited to 50% but may be increased to 65% of the amount of the donation. The credit must be claimed in the year that the qualifying donation is made and credit amounts that exceed the tax due may be carried forward for up to five years. For further information, see TIR 16-15.
Under prior law, the Massachusetts low-income housing tax credits were available only to taxpayers who had been allocated federal low-incomehousing tax credits. However, effective August 1, 2010, the legislature authorized DHCD to grant state low-income housing tax credits (within the annual cap) to otherwise eligible projects that do not receive a federal low-income housing credit.
The LIHTC is a transferable, non-refundable, five year credit, which may be carried forward for up to 5 years.
Effective January 1, 2017, the LIHTC expanded to also provide a non-refundable, single year tax credit for corporate excise and personal income taxpayers that donate real or personal property to certain non-profit entities for use in purchasing, constructing, or rehabilitating a qualified Massachusetts project. This credit is generally limited to 50% but may be increased to 65% of the amount of the donation. The credit must be claimed in the year that the qualifying donation is made and credit amounts that exceed the tax due may be carried forward for up to five years. For further information, see TIR 16-15.
M.G.L. c. 63, § 31H
106.7
2.610
Historic Buildings Rehabilitation Credit
Historic Buildings Rehabilitation Credit
To claim historic rehabilitation tax credit ("HRTC"), a historic rehabilitation project must be complete and have been certified by the Massachusetts Historical Commission (MHC), which determines the amount of qualifying expenditures. Filers may claim up to 20% of their qualified rehabilitation expenditures.
Unused portions of the HRTC may be carried forward for up to 5 years and transferred or sold to another taxpayer, but are not refundable. Additionally, HRTC awards generally may be transferred. The HRTC is not subject to the 50% limitation rule for corporate taxpayers. If the taxpayer disposes of the property generating the HRC, a portion of the credit may be subject to recapture.
The expenditure for this item (combined with the Historic Rehabilitation Credit for personal income tax filers, item 1.610) was originally capped at $15 million per year, with a start date for the credit of January 1, 2005 and an end date of December 31, 2009. Chapter 123 of the Acts of 2006 extended the availability of the credit for an additional 2 years, to December 31, 2011. Again, Chapter 131 of the Acts of 2010 extended the availability of the credit for an additional 6 years to December 31, 2017, with an annual cap of $50 million. Chapter 165 of the Acts of 2014 further extends this credit, including the $50 million annual limit, for an additional five years to December 31, 2022.
Effective August 13, 2014, MHC is allowed, subject to certain criteria, to transfer HRC awards to taxpayers subject to the personal income tax imposed by G.L.c. 62 that acquire a qualified historic structure. In the case of a multi-phased project the MHC is allowed to transfer HRC awards for any phase that meets the criteria. Effective August 10, 2016, such transfer is also allowed for taxpayers subject to the corporation excise under G.L. c. 63. See TIR 14-13 and 16-15.
Enacted in May, 2018, chapter 99 of the Acts of 2018 increased the annual cap to $55 million, which is effective January 1, 2018.
Unused portions of the HRTC may be carried forward for up to 5 years and transferred or sold to another taxpayer, but are not refundable. Additionally, HRTC awards generally may be transferred. The HRTC is not subject to the 50% limitation rule for corporate taxpayers. If the taxpayer disposes of the property generating the HRC, a portion of the credit may be subject to recapture.
The expenditure for this item (combined with the Historic Rehabilitation Credit for personal income tax filers, item 1.610) was originally capped at $15 million per year, with a start date for the credit of January 1, 2005 and an end date of December 31, 2009. Chapter 123 of the Acts of 2006 extended the availability of the credit for an additional 2 years, to December 31, 2011. Again, Chapter 131 of the Acts of 2010 extended the availability of the credit for an additional 6 years to December 31, 2017, with an annual cap of $50 million. Chapter 165 of the Acts of 2014 further extends this credit, including the $50 million annual limit, for an additional five years to December 31, 2022.
Effective August 13, 2014, MHC is allowed, subject to certain criteria, to transfer HRC awards to taxpayers subject to the personal income tax imposed by G.L.c. 62 that acquire a qualified historic structure. In the case of a multi-phased project the MHC is allowed to transfer HRC awards for any phase that meets the criteria. Effective August 10, 2016, such transfer is also allowed for taxpayers subject to the corporation excise under G.L. c. 63. See TIR 14-13 and 16-15.
Enacted in May, 2018, chapter 99 of the Acts of 2018 increased the annual cap to $55 million, which is effective January 1, 2018.
M.G.L. c. 63, § 38R
34.2
2.614
Film (or Motion Picture) Credit
Film (or Motion Picture) Credit
For taxable years beginning on or after January 1, 2006 and before January 1, 2023, Massachusetts allows two credits for motion picture production companies who meet certain qualification requirements. Production companies who incur at least $50,000 of production costs in Massachusetts are eligible for income and corporate excise tax credits equal to 25% of the total Massachusetts payroll for the production, excluding salaries of $1 million and higher. In addition, production companies whose Massachusetts production expenses exceed 50% of the total production cost receive an income and corporate excise tax credit of 25% of the total Massachusetts production expense. Supporting documentation is available to the Department of Revenue upon request.
This tax credit is refundable at 90% of the approved credit amounts by the written election of the taxpayer or may be carried forward for up to 5 years. In addition, all or any portion of tax credits issued may be transferred, sold or assigned to other taxpayers with tax liabilities under chapter 62 (the individual income tax) or chapter 63 (the corporate or other business excise taxes). For applications submitted prior to January 1, 2007, film tax credits were capped at $7 million for any one motion picture production; for applications submitted on or after January 1, 2007, there is no cap. Also, the sunset date for the film incentives statute has been extended from January 1, 2013 to January 1, 2023. See TIR 07-15 for more details.
This tax credit is refundable at 90% of the approved credit amounts by the written election of the taxpayer or may be carried forward for up to 5 years. In addition, all or any portion of tax credits issued may be transferred, sold or assigned to other taxpayers with tax liabilities under chapter 62 (the individual income tax) or chapter 63 (the corporate or other business excise taxes). For applications submitted prior to January 1, 2007, film tax credits were capped at $7 million for any one motion picture production; for applications submitted on or after January 1, 2007, there is no cap. Also, the sunset date for the film incentives statute has been extended from January 1, 2013 to January 1, 2023. See TIR 07-15 for more details.
M.G.L. c. 63, § 38X
78.0
2.615
Medical Device User Fee Credit
Medical Device User Fee Credit
The Medical Device Credit is equal to 100% of the user fees actually paid to the United States Food and Drug Administration (USFDA) by a medical device company during the taxable year for which the tax is due for pre-market submissions (e.g., applications, supplements, or 510(k) submissions) to market new technologies or upgrades, changes, or enhancements to existing technologies, developed or manufactured in Massachusetts. The credit may be carried forward for up to 5 years. Also the credit may be transferred or sold to another taxpayer, but is not refundable.
M.G.L. c. 63, § 31L
2.0
2.617
Life Sciences Tax Incentive Program
Life Sciences Tax Incentive Program
On June 16, 2008, "An Act Providing for the Investment in and Expansion of the Life Sciences Industry in the Commonwealth" was passed. The Act established the Life Sciences Tax Incentive Program which initially included, among other things, the following credits: the life sciences research credit, the life sciences refundable research credit, the life sciences refundable investment tax credit, and the life sciences FDA user fees credit, effective from January 1, 2009 through December 31, 2018, which was later extended to December 31, 2028. Effective January 1, 2011, the life sciences refundable jobs credit was added to this program. Since the tax expenditures under this line item will be subject to approval and their composition will differ from year-to-year, it is not known what proportion will be in the form of corporate tax credits as opposed to income tax credits. However, because the Department of Revenue believes that the largest portion of the tax expenditures described in this line item will be in the form of corporate tax credits, it has placed it in this section of the tax expenditure budget. Except for the life sciences research credit, the other credits are refundable up to 90%.
Effective for tax years beginning on or after January 1, 2017, an angel investor credit is allowed for individual income taxpayers. The credit will be administered within the cumulative cap of $25 million for all the life sciences incentives. See St. 2016, c. 219, § 72; TIR 16-15.
Accordingly, the addition of the angel investor credit is reflected in the tax expenditure estimation of the life sciences tax incentive program, though the angel investor credit will be claimed by individual income taxpayers.
Effective for tax years beginning on or after January 1, 2017, an angel investor credit is allowed for individual income taxpayers. The credit will be administered within the cumulative cap of $25 million for all the life sciences incentives. See St. 2016, c. 219, § 72; TIR 16-15.
Accordingly, the addition of the angel investor credit is reflected in the tax expenditure estimation of the life sciences tax incentive program, though the angel investor credit will be claimed by individual income taxpayers.
21.0
2.618
Dairy Farmers Credit
Dairy Farmers Credit
The Massachusetts dairy farmer tax credit was established to offset the cyclical downturns in milk prices paid to dairy farmers and is based on the U.S. Federal Milk Marketing Order for the applicable market, such that when the U.S. Federal Milk Marketing Order price drops below a trigger price anytime during the taxable year the taxpayer will be entitled to the tax credit. The total cumulative value of the credits authorized pursuant to this section combined with section 6(o) of chapter 62 of the General Laws shall not exceed $6 million annually. The Chapter 154 of the Acts of 2018 increased the cap from $4 million.
A taxpayer who holds a certificate of registration as a dairy farmer pursuant to M.G.L. Ch. 94, sec. 16A is allowed to take a refundable tax credit based on the amount of milk produced and sold. These credits may not be sold or transferred to another taxpayer, but are refundable at 100% of face value.
A taxpayer who holds a certificate of registration as a dairy farmer pursuant to M.G.L. Ch. 94, sec. 16A is allowed to take a refundable tax credit based on the amount of milk produced and sold. These credits may not be sold or transferred to another taxpayer, but are refundable at 100% of face value.
0.8
2.619
Conservation Land Credit
Conservation Land Credit
A tax credit is allowed for qualified donations of certified land to a public or private conservation agency. The credit is equal to 50% of the fair market value of the qualified donation. The amount of the credit that may be claimed by a taxpayer for each qualified donation cannot exceed $75,000. Approval of the donation is required from the Secretary of the Office of Energy & Environment Affairs. The credits may not be sold or transferred to another taxpayer, but are refundable. The total credits that may be approved are capped at $2.0 million annually for the combined amount from personal income tax filers and chapter 63 taxpayers.
0.0
2.620
Employer Wellness Program Tax Credit
Employer Wellness Program Tax Credit
The 2012 Health Care Act established an Employer Wellness Program Tax Credit that was effective for tax years beginning on or after January 1, 2013 and set to expire on December 31, 2017. The Employer Wellness Program Tax Credit was created to provide incentives for business to recognize the benefits of wellness programs with the goal of providing smaller businesses with an expanded opportunity to implement these programs. The credit is available to both chapter 62 and chapter 63 taxpayers (personal income taxpayers and corporate & business excise taxpayers).
The credit is set at 25 percent of the costs associated with implementing a "certified wellness program." The maximum amount of Employer Wellness Program Credits available to a taxpayer is $10,000 in any tax year. The total amount of Employer Wellness Program Credits authorized by the DPH is subject to a $15 million annual cap starting calendar year 2013. The Employer Wellness Program Tax Credit is neither refundable nor transferrable. However, the portion of the Employer Wellness Program Tax Credit that exceeds the tax for the taxable year may be carried forward and applied against such taxpayer's tax liability in any of the succeeding 5 taxable years. DPH has promulgated a regulation, 105 CMR 216.000, entitled Massachusetts Wellness Tax Credit Incentive, which sets forth criteria for authorizing and certifying the credit.
The credit is set at 25 percent of the costs associated with implementing a "certified wellness program." The maximum amount of Employer Wellness Program Credits available to a taxpayer is $10,000 in any tax year. The total amount of Employer Wellness Program Credits authorized by the DPH is subject to a $15 million annual cap starting calendar year 2013. The Employer Wellness Program Tax Credit is neither refundable nor transferrable. However, the portion of the Employer Wellness Program Tax Credit that exceeds the tax for the taxable year may be carried forward and applied against such taxpayer's tax liability in any of the succeeding 5 taxable years. DPH has promulgated a regulation, 105 CMR 216.000, entitled Massachusetts Wellness Tax Credit Incentive, which sets forth criteria for authorizing and certifying the credit.
St. 2012, c. 224, §§ 41, 41A, 56, 56A, 238, 239, 297, and 298; M.G.L. c. 62, § 6N; M.G.L. c. 63, § 38FF.
0.0
2.621
Community Investment Tax Credit
Community Investment Tax Credit
The 2012 Jobs Act provides a Community Investment Tax Credit that is effective January 1, 2014 and is set to expire on December 31, 2019. However, St. 2018, chapter 99, § 25 extended the sunset date for the credit to year 2025. The credit was created to enable local residents and stakeholders to work with and through community development corporations to partner with nonprofit, public and private entities to improve economic opportunities for low and moderate income households and other residents in urban, rural and suburban communities across the commonwealth. The credit is available to both chapter 62 and chapter 63 taxpayers (personal income taxpayers and corporate & business excise taxpayers).
The Department of Housing and Community Development will administer the credit program by: 1) issuing a certification to a taxpayer after the taxpayer makes a qualified investment; 2) authorizing a dollar amount of credit for a qualified investment; 3) developing regulations and procedures with the Department of Revenue to implement the Community Investment Credit.
The certification will be acceptable as proof that the expenditures related to such investment constitute qualified investments for purposes of the community investment credit. The Community Investment Credit is set at 50 percent of the total qualified investments made by a taxpayer in a "community partner," i.e., a "community development corporation" or a "community support organization," selected by the Department of Housing and Community Development through a competitive process. A qualified investment must be in the form of a cash contribution of at least $1,000. A taxpayer may invest in more than one community partner, but may not claim more than $1 million of credits in any single taxable year. The total amount of the credit was subject to a $3 million cap in taxable year 2014, and $6 million in each year of taxable years 2015 through 2018, $8 million in each year of taxable years 2019 and 2020, $10 million in each year of taxable years 2021 and 2022, and $12 million in each year of taxable years 2023 through 2025. This credit is refundable, but not transferrable and it could be carried over up to 5 years.
Effective August 10, 2016, the standard for determining whether a recipient of a prior community investment tax credit allocation is eligible for a subsequent allocation has changed. As of that date, a community partner is eligible to receive a subsequent community investment tax credit allocation if the Department of Housing and Community Development determines that the community partner has made a satisfactory progress towards utilizing any prior allocation it has received. Prior to this change, a community partner was required to have utilized at least 95% of its prior allocation to be eligible for a subsequent allocation. For further information, see TIR 16-15.
The Department of Housing and Community Development will administer the credit program by: 1) issuing a certification to a taxpayer after the taxpayer makes a qualified investment; 2) authorizing a dollar amount of credit for a qualified investment; 3) developing regulations and procedures with the Department of Revenue to implement the Community Investment Credit.
The certification will be acceptable as proof that the expenditures related to such investment constitute qualified investments for purposes of the community investment credit. The Community Investment Credit is set at 50 percent of the total qualified investments made by a taxpayer in a "community partner," i.e., a "community development corporation" or a "community support organization," selected by the Department of Housing and Community Development through a competitive process. A qualified investment must be in the form of a cash contribution of at least $1,000. A taxpayer may invest in more than one community partner, but may not claim more than $1 million of credits in any single taxable year. The total amount of the credit was subject to a $3 million cap in taxable year 2014, and $6 million in each year of taxable years 2015 through 2018, $8 million in each year of taxable years 2019 and 2020, $10 million in each year of taxable years 2021 and 2022, and $12 million in each year of taxable years 2023 through 2025. This credit is refundable, but not transferrable and it could be carried over up to 5 years.
Effective August 10, 2016, the standard for determining whether a recipient of a prior community investment tax credit allocation is eligible for a subsequent allocation has changed. As of that date, a community partner is eligible to receive a subsequent community investment tax credit allocation if the Department of Housing and Community Development determines that the community partner has made a satisfactory progress towards utilizing any prior allocation it has received. Prior to this change, a community partner was required to have utilized at least 95% of its prior allocation to be eligible for a subsequent allocation. For further information, see TIR 16-15.
St. 2012, c. 238, §§ 29, 30, 35, 36 ; M.G.L. c. 62, § 6M; M.G.L. c. 63, § 38EE ; St. 2018, c. 99, §§ 21, 25
4.5
2.622
Certified Housing Development Tax Credit
Certified Housing Development Tax Credit
Certified Housing Development Program provides a credit for certain qualified rehabilitation expenditures with respect to a certified housing development projects created by adding subsection (q) to G.L. c. 62, § 6 and section 38BB to G.L. c. 63. The credit may be up to 10% of the cost of "qualified substantial rehabilitation expenditures" of the market rate units within the projects as defined in G.L. c. 40V, § 1.
There is a $5 million ($10 million from January 1, 2015 to December 31, 2023) cap on the amount of credit that may be awarded under the program in a calendar year. Before 2017, the cap was part of an overall $25 million ($30 million for 2015 and 2016 ) cap imposed on the Economic Development Incentive Program (EDIP) credit authorized pursuant to G.L. c. 62 § 6(g) and c. 63, 38N.
Effective January 1, 2017, the certified housing development tax credit is available for 25% of "qualified project expenditures" instead of 10% of "qualified substantial rehabilitation expenditures." The carry forward period for which the credit can be used is changed from 5 to 10 years. In addition, the annual cap is no longer a part of the overall annual cap imposed on the EDIP. For further information, see TIR 16-15.
There is a $5 million ($10 million from January 1, 2015 to December 31, 2023) cap on the amount of credit that may be awarded under the program in a calendar year. Before 2017, the cap was part of an overall $25 million ($30 million for 2015 and 2016 ) cap imposed on the Economic Development Incentive Program (EDIP) credit authorized pursuant to G.L. c. 62 § 6(g) and c. 63, 38N.
Effective January 1, 2017, the certified housing development tax credit is available for 25% of "qualified project expenditures" instead of 10% of "qualified substantial rehabilitation expenditures." The carry forward period for which the credit can be used is changed from 5 to 10 years. In addition, the annual cap is no longer a part of the overall annual cap imposed on the EDIP. For further information, see TIR 16-15.
Origin: St. 2010, c. 240; M.G.L. c. 40V; M.G.L. c. 63, § 38BB
9.0
2.623
Veteran's Hire Tax Credit
Veteran's Hire Tax Credit
This newly added tax expenditure item (St. 2017, c. 47) allows business corporations that hire veterans and meet certain requirements a tax credit equal to $2,000 for each qualified veteran hired. The business corporation must (i) employ less than 100 employees; (ii) be certified by the commissioner of veteran's services; and (iii) qualify for and claim the Work Opportunity Credit allowed under I.R.C. § 51, as amended and in effect for the taxable year.
In order to claim the credit, the primary place of employment and the primary residence of the qualified veteran must be in Massachusetts. A business corporation must obtain certification that the veteran is a qualified veteran from the Department of Career Services (or any successor agency), no later than the employee's first day of work.
A business corporation that is eligible for and claims the credit allowed under this subsection in a taxable year, with respect to a qualified veteran employee, will be eligible for a second credit equal to $2,000 in the subsequent taxable year, subject to certification of the veteran employee's continued employment during the subsequent taxable year.
The credit is non-transferrable and non-refundable. However, any excess amount of credit over the tax due may be carried forward up to 3 subsequent taxable years. The total cumulative value of the credits authorized must not exceed $1,000,000 annually. The credit is available for qualified veterans hired after July 1, 2017 for tax years beginning on or after January 1, 2017. See TIR 17-10 for detail.
In order to claim the credit, the primary place of employment and the primary residence of the qualified veteran must be in Massachusetts. A business corporation must obtain certification that the veteran is a qualified veteran from the Department of Career Services (or any successor agency), no later than the employee's first day of work.
A business corporation that is eligible for and claims the credit allowed under this subsection in a taxable year, with respect to a qualified veteran employee, will be eligible for a second credit equal to $2,000 in the subsequent taxable year, subject to certification of the veteran employee's continued employment during the subsequent taxable year.
The credit is non-transferrable and non-refundable. However, any excess amount of credit over the tax due may be carried forward up to 3 subsequent taxable years. The total cumulative value of the credits authorized must not exceed $1,000,000 annually. The credit is available for qualified veterans hired after July 1, 2017 for tax years beginning on or after January 1, 2017. See TIR 17-10 for detail.
Origin: St. 2017, c. 47; M.G.L. c. 63, § 38GG
0.5
2.624
Apprentice Tax Credit
Apprentice Tax Credit
"An Act relative to economic development in the commonwealth" (St. 2018, c. 228) established the apprentice credit for individual and corporate taxpayers. The credit is awarded to employers, who are registered with the division of apprentice standards as an apprenticeship program sponsor and enter into an apprentice agreement with each apprentice for whom the credit is claimed. Employers that claim the credit in a taxable year will be eligible for an additional credit in the following year.
The credit is equal to the lesser of $4,800 or 50% of the wages paid to the apprentice for each apprentice. The total cumulative amount of credits authorized annually is $2.5 million. The credit is refundable and nontransferable. The credit applies to the taxpayers whose tax year starts from January 1, 2019.
The credit is equal to the lesser of $4,800 or 50% of the wages paid to the apprentice for each apprentice. The total cumulative amount of credits authorized annually is $2.5 million. The credit is refundable and nontransferable. The credit applies to the taxpayers whose tax year starts from January 1, 2019.
1.3
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