2.600
2.600 Credits Against Tax
Tax Expenditure Name
Tax Expenditure Number
FY2018
FY2019
FY2020
FY2021
FY2022
Credits Against Tax
2.600
604.7
700.9
723.8
801.4
880.4
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Tax Item
Description
Origin
FY2022
2.602
Investment Credit
Investment Credit
Manufacturing corporations and corporations engaged primarily in research and development, agriculture or commercial fishing are allowed to take an investment tax credit (ITC) of 3% (for tax years ending before January 1, 1993 the rate was 1%) of the cost of qualifying tangible property. Both owners and eligible corporate lessees of property may claim the ITC. Qualifying property includes tangible personal property, real property including buildings and build-outs. It does not include motor vehicles. The property must be depreciable under Code § 167 and have a useful life of four years or more, and it must be used in Massachusetts and situated in Massachusetts on the last day of the taxable year. The maximum amount of ITC allowed in any one taxable year cannot exceed fifty percent of the excise due for the taxable year. The credit is neither transferable nor refundable. A corporation that does not use the full amount of ITC generated in a taxable year because the credit exceeded its excise for the taxable year may carry over the credit, as reduced from year to year, for three years. Any portion of ITC not used in a taxable year because of the fifty percent limitation may be carried over, as reduced from year to year, indefinitely. A portion of the credit is subject to a recapture tax if the qualifying property sold or otherwise transferred before the end of its useful life, unless the property was in qualified use for more than twelve years.
The incentive was enacted on July 1, 1971, and applied to qualifying tangible property acquired, constructed, reconstructed, or erected after December 31, 1969.
The incentive was enacted on July 1, 1971, and applied to qualifying tangible property acquired, constructed, reconstructed, or erected after December 31, 1969.
M.G.L. c. 63, § 31A (i), (j)
77.1
2.603
Vanpool Credit
Vanpool Credit
Domestic and foreign corporations are allowed 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 to and from the workplace. 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
Massachusetts provides corporations a credit for increased spending in research and development. The credit is available only for expenditures for research activity conducted in Massachusetts. The Massachusetts research credit, in large part, is based on the research credit allowed under Internal Revenue Code (Code) § 41. In particular, the alternative simplified method for calculating the credit is model after the federal alternative simplified method.
There are two methods for calculating the Massachusetts research credit. Under one method, the amount of the credit is equal to: 10% of the difference between the current year's Massachusetts qualified research expenses and a "base amount" plus 15% of the Massachusetts basic research payments for the taxable year as determined under Code § 41(e)(1)(A). The actual computation of the credit under this method can be complex. Pursuant to legislation enacted in 2014, a taxpayer can now elect to determine its credit using the so-called "alternative simplified method." This method is based on the federal simplified method which was enacted in 2006. Using this method, the amount of the credit is equal to a percentage of the difference between the corporation's qualified research expenses for the current taxable year and 50% of the corporation's average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. The percentage used to calculate the credit under the alternate simplified method is being phased in over a 7-year period. For calendar years 2015, 2016 and 2017, a rate of 5 percent was used to calculate the credit under the alternative simplified method, for calendar years 2018, 2019 and 2020, that rate was 7.5 percent and for calendar years beginning on or after January 1, 2021, the rate is 10 percent.
Regardless of which method the corporation uses to determine the credit amount to which it is entitled for a taxable year, the amount of research credit that can be used in a taxable year, regardless of how much credit is generated, is limited to 100 per cent of a corporation's first $25,000 of excise, plus 75 per cent of the corporation's excise in excess of $25,000. The $25,000 amount has to be shared by members of affiliated groups of corporations. Credit not used because of the limitations generally can be carried over for 15 years before it expires. In certain instances the credit can be carried forward indefinitely.
The research credit is not transferable and generally is not refundable. However, a certified Life Science Company may be awarded an incentive allowing it to receive a refund of a portion of its available excess research credits in lieu of carrying such credits forward for use in later years. The incentive was enacted in January 1, 1991, pursuant to Chapter 138 of the Acts of 1991 § 130. The incentive itself is not set to expire.
There are two methods for calculating the Massachusetts research credit. Under one method, the amount of the credit is equal to: 10% of the difference between the current year's Massachusetts qualified research expenses and a "base amount" plus 15% of the Massachusetts basic research payments for the taxable year as determined under Code § 41(e)(1)(A). The actual computation of the credit under this method can be complex. Pursuant to legislation enacted in 2014, a taxpayer can now elect to determine its credit using the so-called "alternative simplified method." This method is based on the federal simplified method which was enacted in 2006. Using this method, the amount of the credit is equal to a percentage of the difference between the corporation's qualified research expenses for the current taxable year and 50% of the corporation's average qualified research expenses for the 3 taxable years preceding the taxable year for which the credit is being determined. The percentage used to calculate the credit under the alternate simplified method is being phased in over a 7-year period. For calendar years 2015, 2016 and 2017, a rate of 5 percent was used to calculate the credit under the alternative simplified method, for calendar years 2018, 2019 and 2020, that rate was 7.5 percent and for calendar years beginning on or after January 1, 2021, the rate is 10 percent.
Regardless of which method the corporation uses to determine the credit amount to which it is entitled for a taxable year, the amount of research credit that can be used in a taxable year, regardless of how much credit is generated, is limited to 100 per cent of a corporation's first $25,000 of excise, plus 75 per cent of the corporation's excise in excess of $25,000. The $25,000 amount has to be shared by members of affiliated groups of corporations. Credit not used because of the limitations generally can be carried over for 15 years before it expires. In certain instances the credit can be carried forward indefinitely.
The research credit is not transferable and generally is not refundable. However, a certified Life Science Company may be awarded an incentive allowing it to receive a refund of a portion of its available excess research credits in lieu of carrying such credits forward for use in later years. The incentive was enacted in January 1, 1991, pursuant to Chapter 138 of the Acts of 1991 § 130. The incentive itself is not set to expire.
477.6
2.605
Economic Development Incentive Program Credit
Economic Development Incentive Program Credit
Under the Economic Development Incentive Program (EDIP), the Economic Assistance Coordination Council (EACC) may award tax credits to taxpayers that participate in a "certified project" (as defined in G.L. c. 23A, §§ 3A and 3F). The amount of credit allowed in each case is determined by the EACC based on numerous factors set forth in G.L. c. 23A, § 3D, including the number of jobs expected to be created, the amount of capital to be invested, and the net new economic benefit expected to be created. The EACC may designate the credit as refundable for any certified project, subject to a limitation that the EACC may not award more than $5 million in refundable credits per year.
The maximum amount of credit used by a taxpayer in any taxable year may not exceed the taxpayer's excise for the taxable year. The EACC is authorized to eliminate or limit carry-over of the credit. The EDIP credits used in a calendar year are subject to an annual cap of $30 million. Recapture is required if the EACC revokes a business project certification.
The credit is not transferable; however, if a certified project is sold or otherwise disposed of, the credit allowed may be transferred to the purchaser of the certified project, provided that the EDIP contract is assigned to and assumed by the purchaser and approved in writing by the EACC.
When it was first enacted in 1993, the credit was for a fixed 5 percent of the costs of qualifying tangible property, and the project had to be located in a designated "economic opportunity area". In 2010, the statute was amended to increase the percentage to "up to 10 percent" and "up to a refundable forty percent" in some cases, eliminate the "economic opportunity area" requirement and impose an annual cap of $25 million. As of 2017, the credit is whatever amount is awarded by the EACC as part of the certification process.
The maximum amount of credit used by a taxpayer in any taxable year may not exceed the taxpayer's excise for the taxable year. The EACC is authorized to eliminate or limit carry-over of the credit. The EDIP credits used in a calendar year are subject to an annual cap of $30 million. Recapture is required if the EACC revokes a business project certification.
The credit is not transferable; however, if a certified project is sold or otherwise disposed of, the credit allowed may be transferred to the purchaser of the certified project, provided that the EDIP contract is assigned to and assumed by the purchaser and approved in writing by the EACC.
When it was first enacted in 1993, the credit was for a fixed 5 percent of the costs of qualifying tangible property, and the project had to be located in a designated "economic opportunity area". In 2010, the statute was amended to increase the percentage to "up to 10 percent" and "up to a refundable forty percent" in some cases, eliminate the "economic opportunity area" requirement and impose an annual cap of $25 million. As of 2017, the credit is whatever amount is awarded by the EACC as part of the certification process.
M.G.L. c. 63, § 38N
16.0
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 Credit
Harbor Maintenance 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.
The incentive was enacted on August 9th, 1996, applicable to qualified harbor maintenance tax paid on or after July 1st, 1996.
The incentive was enacted on August 9th, 1996, applicable to qualified harbor maintenance tax paid on or after July 1st, 1996.
1.5
2.608
Brownfields Credit
Brownfields Credit
Taxpayers are allowed to claim a credit for amounts expended to remediate contaminated property owned or leased for business purposes and located within an economically distressed area.
The Brownfields credit may be claimed by a business corporation that commences and diligently pursues an environmental response action and achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E. Taxpayers may sell, transfer, or assign the credit Under prior law, net response and removal costs incurred by a taxpayer between August 1, 1998 and January 1 2019, were eligible for the credit provided that the environmental response action commenced before August 5, 2018. Chapter 99 of the Acts of 2018 changed the date by which the environmental response action must be commenced to August 5, 2023, and the time for incurring eligible costs that qualify for the credit to 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.
The Brownfields credit may be claimed by a business corporation that commences and diligently pursues an environmental response action and achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E. Taxpayers may sell, transfer, or assign the credit Under prior law, net response and removal costs incurred by a taxpayer between August 1, 1998 and January 1 2019, were eligible for the credit provided that the environmental response action commenced before August 5, 2018. Chapter 99 of the Acts of 2018 changed the date by which the environmental response action must be commenced to August 5, 2023, and the time for incurring eligible costs that qualify for the credit to 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
26.7
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 (i) the construction or development of new low income housing, (ii) the preservation and improvement of existing state or federally-assisted housing or (iiI) the donation of real or personal property to certain non-profit entities for use in purchasing, constructing or rehabilitating a project otherwise eligible for the LIHTC. 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.
The LIHTC is a transferable, non-refundable, five year credit, which may be carried forward for up to 5 years.
The credit for the donation of property is a non-refundable, single year tax credit for corporate excise and personal income. 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.
The LIHTC is a transferable, non-refundable, five year credit, which may be carried forward for up to 5 years.
The credit for the donation of property is a non-refundable, single year tax credit for corporate excise and personal income. 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.
115.0
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
52.5
2.614
Film (or Motion Picture) Credit
Film (or Motion Picture) Credit
While often referred to as a singular "Life Science credit," Massachusetts offers an array of life sciences tax incentives for the life sciences industry, which consist of multiple tax credits, a corporate excise deduction, and a sales and use tax exemption. The original tax incentives enacted in "An Act Providing for the Investment in and Expansion of the Life Sciences Industry in the Commonwealth," (St. 2008, c. 130), include the following tax credits: the Life Sciences FDA User Fees Tax Credit, the Life Sciences Refundable Investment Tax Credit, and the Life Sciences Research Tax Credit (and also a modified version of the standard Research Tax Credit); as well as a corporate excise deduction allowing for the deduction of qualified clinical expenses for certain drugs that would not be fully deductible otherwise, and a sales and use tax exemption for materials used to construct a life sciences facility. Effective January 1, 2011, the Life Sciences Refundable Jobs Tax Credit was added to this program (St. 2011, c. 58, §§ 65, 70). Most recently, the Angel Investor Tax Credit was added to the ambit of life sciences tax incentives (St. 2016, c. 219, § 139).
While most of the tax credits are available to life sciences companies subject to either the personal income tax or the corporate excise, the Life Sciences Research Tax Credit and the modified version of the standard Research Tax Credit are available only to life sciences companies subject to a corporate excise, and the Angel Investor Tax Credit is only available to personal income taxpayers. Additional information about the scope of the life sciences tax incentives is provided in greater detail in the "Costs" section below.
The Life Sciences Tax Incentive Program is administered by the Massachusetts Life Sciences Center (MLSC). The MLSC is charged with reviewing and, as appropriate, approving applications from life sciences companies, which certifies them as eligible for various life sciences tax incentives. The life sciences tax incentives are available only to certified life sciences companies to the extent authorized by the MLSC. Prior to receiving any life sciences tax incentives, a company must be certified by the MLSC. To become a certified life sciences company, the company must apply to the MLSC by a date set by the MLSC. The company must be registered to do business in Massachusetts, maintain at least 10 full-time employees as of the end of the previous calendar year, and be in good standing with the Secretary of the Commonwealth and the Massachusetts Department of Revenue.
In evaluating an applicant, the MLSC considers certain criteria, such as whether the applicant has shown it has the ability to create and retain jobs for five years, as well as general considerations including a wide geographic distribution of life sciences operations in Massachusetts, a wide distribution of life sciences technologies and industries supported by the MLSC, and diversity among businesses at different stages of product development and commercialization. The MLSC particularly encourages companies from outside Greater Boston to apply.
All of the life sciences tax incentives provided to a life sciences company are subject to recapture if the life sciences company's certification is revoked by the MLSC.
While most of the tax credits are available to life sciences companies subject to either the personal income tax or the corporate excise, the Life Sciences Research Tax Credit and the modified version of the standard Research Tax Credit are available only to life sciences companies subject to a corporate excise, and the Angel Investor Tax Credit is only available to personal income taxpayers. Additional information about the scope of the life sciences tax incentives is provided in greater detail in the "Costs" section below.
The Life Sciences Tax Incentive Program is administered by the Massachusetts Life Sciences Center (MLSC). The MLSC is charged with reviewing and, as appropriate, approving applications from life sciences companies, which certifies them as eligible for various life sciences tax incentives. The life sciences tax incentives are available only to certified life sciences companies to the extent authorized by the MLSC. Prior to receiving any life sciences tax incentives, a company must be certified by the MLSC. To become a certified life sciences company, the company must apply to the MLSC by a date set by the MLSC. The company must be registered to do business in Massachusetts, maintain at least 10 full-time employees as of the end of the previous calendar year, and be in good standing with the Secretary of the Commonwealth and the Massachusetts Department of Revenue.
In evaluating an applicant, the MLSC considers certain criteria, such as whether the applicant has shown it has the ability to create and retain jobs for five years, as well as general considerations including a wide geographic distribution of life sciences operations in Massachusetts, a wide distribution of life sciences technologies and industries supported by the MLSC, and diversity among businesses at different stages of product development and commercialization. The MLSC particularly encourages companies from outside Greater Boston to apply.
All of the life sciences tax incentives provided to a life sciences company are subject to recapture if the life sciences company's certification is revoked by the MLSC.
M.G.L. c. 63, § 38X
78.0
2.615
Medical Device User Fee Credit
Medical Device User Fee Credit
Medical device companies subject to tax under either the personal income tax under M.G.L. c. 62 or a corporate excise under M.G.L. c. 63, and which develop or manufacture medical devices in Massachusetts can claim a transferable credit equal to 100% of the user fees paid by them when submitting certain medical device applications and supplements to the FDA. The credit may not be carried forward to subsequent tax years and is not refundable. However, unused portions of the credit may be transferred, and the transferee may carry over the credit, but must use it within 5 years.
This particular tax expenditure was enacted on July 8, 2006, making the incentive applicable from tax years beginning on or after January 1, 2006. St. 2006, c. 144, 145.
This particular tax expenditure was enacted on July 8, 2006, making the incentive applicable from tax years beginning on or after January 1, 2006. St. 2006, c. 144, 145.
M.G.L. c. 63, § 31L
0.5
2.617
Life Sciences Tax Incentive Program
Life Sciences Tax Incentive Program
While often referred to as a singular "Life Science credit," Massachusetts offers an array of life sciences tax incentives for the life sciences industry, which consist of multiple tax credits, a corporate excise deduction, and a sales and use tax exemption. The original tax incentives enacted in "An Act Providing for the Investment in and Expansion of the Life Sciences Industry in the Commonwealth," (St. 2008, c. 130), include the following tax credits: the Life Sciences FDA User Fees Tax Credit, the Life Sciences Refundable Investment Tax Credit, and the Life Sciences Research Tax Credit (and also a modified version of the standard Research Tax Credit); as well as a corporate excise deduction allowing for the deduction of qualified clinical expenses for certain drugs that would not be fully deductible otherwise, and a sales and use tax exemption for materials used to construct a life sciences facility. Effective January 1, 2011, the Life Sciences Refundable Jobs Tax Credit was added to this program (St. 2011, c. 58, §§ 65, 70). Most recently, the Angel Investor Tax Credit was added to the ambit of life sciences tax incentives (St. 2016, c. 219, § 139).
While most of the tax credits are available to life sciences companies subject to either the personal income tax or the corporate excise, the Life Sciences Research Tax Credit and the modified version of the standard Research Tax Credit are available only to life sciences companies subject to a corporate excise, and the Angel Investor Tax Credit is only available to personal income taxpayers. Additional information about the scope of the life sciences tax incentives is provided in greater detail in the "Costs" section below.
The Life Sciences Tax Incentive Program is administered by the Massachusetts Life Sciences Center (MLSC). The MLSC is charged with reviewing and, as appropriate, approving applications from life sciences companies, which certifies them as eligible for various life sciences tax incentives. The life sciences tax incentives are available only to certified life sciences companies to the extent authorized by the MLSC. Prior to receiving any life sciences tax incentives, a company must be certified by the MLSC. To become a certified life sciences company, the company must apply to the MLSC by a date set by the MLSC. The company must be registered to do business in Massachusetts, maintain at least 10 full-time employees as of the end of the previous calendar year, and be in good standing with the Secretary of the Commonwealth and the Massachusetts Department of Revenue.
In evaluating an applicant, the MLSC considers certain criteria, such as whether the applicant has shown it has the ability to create and retain jobs for five years, as well as general considerations including a wide geographic distribution of life sciences operations in Massachusetts, a wide distribution of life sciences technologies and industries supported by the MLSC, and diversity among businesses at different stages of product development and commercialization. The MLSC particularly encourages companies from outside Greater Boston to apply.
All of the life sciences tax incentives provided to a life sciences company are subject to recapture if the life sciences company's certification is revoked by the MLSC.
While most of the tax credits are available to life sciences companies subject to either the personal income tax or the corporate excise, the Life Sciences Research Tax Credit and the modified version of the standard Research Tax Credit are available only to life sciences companies subject to a corporate excise, and the Angel Investor Tax Credit is only available to personal income taxpayers. Additional information about the scope of the life sciences tax incentives is provided in greater detail in the "Costs" section below.
The Life Sciences Tax Incentive Program is administered by the Massachusetts Life Sciences Center (MLSC). The MLSC is charged with reviewing and, as appropriate, approving applications from life sciences companies, which certifies them as eligible for various life sciences tax incentives. The life sciences tax incentives are available only to certified life sciences companies to the extent authorized by the MLSC. Prior to receiving any life sciences tax incentives, a company must be certified by the MLSC. To become a certified life sciences company, the company must apply to the MLSC by a date set by the MLSC. The company must be registered to do business in Massachusetts, maintain at least 10 full-time employees as of the end of the previous calendar year, and be in good standing with the Secretary of the Commonwealth and the Massachusetts Department of Revenue.
In evaluating an applicant, the MLSC considers certain criteria, such as whether the applicant has shown it has the ability to create and retain jobs for five years, as well as general considerations including a wide geographic distribution of life sciences operations in Massachusetts, a wide distribution of life sciences technologies and industries supported by the MLSC, and diversity among businesses at different stages of product development and commercialization. The MLSC particularly encourages companies from outside Greater Boston to apply.
All of the life sciences tax incentives provided to a life sciences company are subject to recapture if the life sciences company's certification is revoked by the MLSC.
M.G.L. c. 62, §§ 6(m), (n), and (r) and M.G.L. c. 63, §§ 31M, 38M(k), 38U, 38W and 38CC
19.6
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.
0.0
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 Credit
Employer Wellness Program Credit
The 2012 Health Care Act established an Employer Wellness Program Tax Credit effective for tax years beginning on or after January 1, 2013 and which expired on December 31, 2017. The 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, available to both personal income taxpayers and corporate & business excise taxpayers,
was set at 25 percent of the costs associated with implementing a "certified wellness program." The maximum amount of credits available to a taxpayer was $10,000 in any tax year. The credit was neither refundable nor transferrable. However, the portion of the tax credit that exceeded the tax for the taxable year was allowed to be carried forward and applied against the taxpayer's tax liability in any of the succeeding 5 taxable years. The Department of Public Health has promulgated a regulation, 105 CMR 216.000, entitled Massachusetts Wellness Tax Credit Incentive, which set forth criteria for authorizing and certifying the credit.
This credit has expired and is no longer available to employers for taxable years beginning after December 31, 2017. However, certain unused credits previously granted to personal income or corporate excise taxpayers remain available to be claimed against their tax liability incurred during tax years up until the period beginning on January 1, 2023.
was set at 25 percent of the costs associated with implementing a "certified wellness program." The maximum amount of credits available to a taxpayer was $10,000 in any tax year. The credit was neither refundable nor transferrable. However, the portion of the tax credit that exceeded the tax for the taxable year was allowed to be carried forward and applied against the taxpayer's tax liability in any of the succeeding 5 taxable years. The Department of Public Health has promulgated a regulation, 105 CMR 216.000, entitled Massachusetts Wellness Tax Credit Incentive, which set forth criteria for authorizing and certifying the credit.
This credit has expired and is no longer available to employers for taxable years beginning after December 31, 2017. However, certain unused credits previously granted to personal income or corporate excise taxpayers remain available to be claimed against their tax liability incurred during tax years up until the period beginning on January 1, 2023.
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.
0.1
2.621
Community Investment Credit
Community Investment Credit
A tax credit is allowed for qualified investments made by a taxpayer to 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, or a community investment fund. The credit is equal to 50% of the total qualified investment made by the taxpayer for the taxable year. No credit will be allowed to a taxpayer that makes a qualified investment of less than $1,000. A taxpayer must claim the credit in the taxable year in which a qualified investment is made. The credit is refundable, or alternatively may be carried forward by the taxpayer for 5 years. The credit is not transferable. The total cumulative value of all credits authorized pursuant to M.G.L. c. 62 § 6M and M.G.L. c. 63, § 38EE cannot $3 million in taxable year 2014, $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.
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
5.0
2.622
Certified Housing Development Credit
Certified Housing Development 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 is part of an over-all $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 is part of an over-all $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 Credit
Veteran's Hire Credit
Certain employers that hire "qualified veterans" who live and work in Massachusetts may be eligible to claim a tax credit equal to $2,000 for each qualified veteran hired. In order to be eligible for the credit, the employer 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. An employer 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.
An employer 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 additional details.
In order to claim the credit, the primary place of employment and the primary residence of the qualified veteran must be in Massachusetts. An employer 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.
An employer 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 additional details.
Origin: St. 2017, c. 47; M.G.L. c. 63, § 38GG
0.5
2.624
Apprentice Credit
Apprentice Credit
"An Act relative to economic development in the commonwealth" (St. 2018, c. 228) established the apprentice credit for individual and corporate taxpayers for tax years beginning on or after January 1, 2019. The credit is awarded to employers, who are (i) registered with the division of apprentice standards as apprenticeship program sponsors and (ii) 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 if they continue to employ the apprentice during the subsequent 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 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.
1.3
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