2.600
2.600 Credits Against Tax
Tax Expenditure Name
Tax Expenditure Number
FY2019
FY2020
FY2021
FY2022
FY2023
Credits Against Tax
2.600
701.8
710.2
789.2
873.8
882.9
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Tax Item
Description
Origin
FY2023
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.
M.G.L. c. 63, § 31A (i), (j)
77.8
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 modeled after the federal alternative simplified method. The credit can be shared among affiliated corporations that are members of the same combined group, subject to limitations.
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 is limited to 100 percent of a corporation's first $25,000 of excise, plus 75 percent of the corporation's excise in excess of $25,000. A single $25,000 amount applies to affiliated groups of corporations. Credit not used because of the limitations generally can be carried over for 15 years. 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 apply to the Massachusetts Life Science Center for a refund of a portion of its available excess research credits in lieu of carrying such credits forward for use in later years.
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 is limited to 100 percent of a corporation's first $25,000 of excise, plus 75 percent of the corporation's excise in excess of $25,000. A single $25,000 amount applies to affiliated groups of corporations. Credit not used because of the limitations generally can be carried over for 15 years. 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 apply to the Massachusetts Life Science Center for a refund of a portion of its available excess research credits in lieu of carrying such credits forward for use in later years.
481.8
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.
Unless designated as refundable, the maximum amount of credit allowed in any one taxable year cannot exceed fifty percent of the excise due for the taxable year. The amount of credit allowed cannot reduce the excise below the minimum excise. 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.
Unless designated as refundable, the maximum amount of credit allowed in any one taxable year cannot exceed fifty percent of the excise due for the taxable year. The amount of credit allowed cannot reduce the excise below the minimum excise. 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; c. 62, § 6(g)
16.1
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 that are shippers, importers, or exporters are allowed to claim a dollar-for-dollar credit against the corporate excise for certain harbor maintenance taxes paid to the federal government. To qualify for the credit the federal tax paid must be attributable to the shipment of break-bulk or containerized cargo by sea and ocean-going vessels through one of three designated Massachusetts ports. The allowable credit is not subject to the 50% limitation of G.L. c. 63, §32C. The credit may not reduce the taxpayer's corporate excise due below the minimum excise, currently $456. The credit is not refundable or transferable. Unused credit may be carried forward for up to 5 years. The expenditure was enacted on August 9, 1996, applicable to harbor maintenance tax paid on or after July 1, 1996.
The FY22 Budget repeals the credit effective for taxable years beginning on or after January 1, 2022. However, unused portions of the credit claimed in taxable years beginning before January 1, 2022 may continue to be carried forward.
The FY22 Budget repeals the credit effective for taxable years beginning on or after January 1, 2022. However, unused portions of the credit claimed in taxable years beginning before January 1, 2022 may continue to be carried forward.
Expired
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
32.3
2.609
Low Income Housing Credit
Low Income Housing Credit
Under G.L. c. 62, § 6I and G.L. c. 63, § 31H, a low-income housing credit is available to eligible c. 62 or c. 63 taxpayers that invest in affordable rental housing ("Qualified Massachusetts Projects"). The Low-Income Housing Tax Credit (LIHTC) is administered through the Massachusetts Department of Housing and Community Development (DHCD). The credit may be claimed in the year that the Qualified Massachusetts Project is placed in service and for each of the four subsequent taxable years.
DHCD ultimately allocates the amount of credit a taxpayer can claim based on an annual aggregate statewide limit, which, prior to the Economic Development Act, was $20 million. Effective for tax years beginning on or after January 1, 2021 and ending on or before December 31, 2025, the Economic Development Act raises the credit's annual limit from $20 million to $40 million. For tax years beginning on or after January 1, 2026, the credit's annual limit will revert to $20 million.
The LIHTC is a transferable, non-refundable, and may be carried forward for up to 5 years.
DHCD ultimately allocates the amount of credit a taxpayer can claim based on an annual aggregate statewide limit, which, prior to the Economic Development Act, was $20 million. Effective for tax years beginning on or after January 1, 2021 and ending on or before December 31, 2025, the Economic Development Act raises the credit's annual limit from $20 million to $40 million. For tax years beginning on or after January 1, 2026, the credit's annual limit will revert to $20 million.
The LIHTC is a transferable, non-refundable, and may be carried forward for up to 5 years.
111.4
2.610
Historic Buildings Rehabilitation Credit
Historic Buildings Rehabilitation Credit
The Massachusetts historic rehabilitation tax credit ("MHRTC") is a credit equal to a percentage, not to exceed 20%, of the qualified rehabilitation expenditures made by a taxpayer in rehabilitating a qualified historic structure which has received final certification by the Massachusetts Historical Commission ("MHC") and has been placed in service. The MHRTC is available to both chapter 62 (personal income) and chapter 63 (corporate) taxpayers.
Unused portions of the MHRTC may be carried forward for up to 5 years and may be transferred or sold to another taxpayer, but are not refundable. The MHRTC cannot be used to reduce the corporate excise due below the minimum excise provided by G.L. c. 63, § 39(b), currently $456. The allowable corporate credit is not subject to the 50% limitation of G.L. c. 63, § 32C. If, before the end of the five-year period beginning on the date on which the qualified historic structure received final certification and was placed in service, the taxpayer disposes of its interest in the structure, the credit will be subject to recapture and the taxpayer's tax for the taxable year in which the disposition occurs will be increased by the recapture amount.
The MHRTC is currently capped at $55 million per year, effective for taxable years beginning January 1, 2018 and ending December 31, 2022. Previously the cap was set at $50 million per year, for taxable years beginning January 1, 2017 and ending December 31, 2022. The original cap was set at $15 million per year, effective for taxable years beginning January 1, 2005 and ending December 31, 2009.
Effective August 13, 2014, taxpayers subject to the personal income tax imposed by G.L. c. 62 that acquire a qualified historic structure may transfer MHRTC awards subject to criteria established by the MHC. In the case of a multi-phased project MHRTC awards may be transferred for any phase of the project that meets the MHC's criteria. Effective August 10, 2016, MHRTC awards also may be transferred by taxpayers subject to the corporate excise under G.L. c. 63. See TIR 15-6 and 16-15.
The credit was due to expire on December 31, 2022. The FY22 Budget amends G.L. c. 62, § 6J and G.L. c. 63, § 38R to extend the credit to tax years ending on or before December 31, 2027.
Unused portions of the MHRTC may be carried forward for up to 5 years and may be transferred or sold to another taxpayer, but are not refundable. The MHRTC cannot be used to reduce the corporate excise due below the minimum excise provided by G.L. c. 63, § 39(b), currently $456. The allowable corporate credit is not subject to the 50% limitation of G.L. c. 63, § 32C. If, before the end of the five-year period beginning on the date on which the qualified historic structure received final certification and was placed in service, the taxpayer disposes of its interest in the structure, the credit will be subject to recapture and the taxpayer's tax for the taxable year in which the disposition occurs will be increased by the recapture amount.
The MHRTC is currently capped at $55 million per year, effective for taxable years beginning January 1, 2018 and ending December 31, 2022. Previously the cap was set at $50 million per year, for taxable years beginning January 1, 2017 and ending December 31, 2022. The original cap was set at $15 million per year, effective for taxable years beginning January 1, 2005 and ending December 31, 2009.
Effective August 13, 2014, taxpayers subject to the personal income tax imposed by G.L. c. 62 that acquire a qualified historic structure may transfer MHRTC awards subject to criteria established by the MHC. In the case of a multi-phased project MHRTC awards may be transferred for any phase of the project that meets the MHC's criteria. Effective August 10, 2016, MHRTC awards also may be transferred by taxpayers subject to the corporate excise under G.L. c. 63. See TIR 15-6 and 16-15.
The credit was due to expire on December 31, 2022. The FY22 Budget amends G.L. c. 62, § 6J and G.L. c. 63, § 38R to extend the credit to tax years ending on or before December 31, 2027.
M.G.L c. 63, § 38R; c. 62, § 6J
48.2
2.614
Film (or Motion Picture) Credit
Film (or Motion Picture) Credit
The Massachusetts film tax incentives, as amended in July 2007, are allowed for taxpayers engaged in the production of feature-length films, videos, digital media projects, television series, and commercials, for theatrical or television viewing. The statute makes no reference to productions that are instead made for viewing on the Internet.
The film tax incentives consist of a tax credit equal to 25% of a film's production cost and 25% of a film's payroll cost, and an exemption from sales tax for film productions. The incentives are dependent upon a taxpayer incurring Massachusetts production expenses of at least $50,000 in a twelve-month period. Assuming that threshold requirement is met, a taxpayer may claim the payroll portion of the credit for any in-state employment of persons in connection with the filming and production of a motion picture, so long as the payment constitutes Massachusetts source income to the recipient.
The credits were due to expire on January 1, 2023. However, the FY22 Budget amends "An Act Providing Incentives to the Motion Picture Industry," which created the film incentive credits, to make them permanent. The FY22 Budget also amends credit eligibility with respect to production expenses. For taxable years beginning on or after January 1, 2022, a taxpayer must incur at least 75% of its production expenses in Massachusetts for a film project to qualify for the credit. A 50% threshold applies to prior taxable years.
The tax credits are available to both corporate excise and personal income tax filers and can be used to reduce the taxpayer's liability. At the taxpayer's election, the Department of Revenue will refund 90% of any amount of the tax credit that exceeds the taxpayer's liability. The tax credits may also be transferred or sold by taxpayers to third parties that may use the tax credits to reduce their Massachusetts corporate, insurance, financial institution, or personal income tax liabilities.
The film tax incentives consist of a tax credit equal to 25% of a film's production cost and 25% of a film's payroll cost, and an exemption from sales tax for film productions. The incentives are dependent upon a taxpayer incurring Massachusetts production expenses of at least $50,000 in a twelve-month period. Assuming that threshold requirement is met, a taxpayer may claim the payroll portion of the credit for any in-state employment of persons in connection with the filming and production of a motion picture, so long as the payment constitutes Massachusetts source income to the recipient.
The credits were due to expire on January 1, 2023. However, the FY22 Budget amends "An Act Providing Incentives to the Motion Picture Industry," which created the film incentive credits, to make them permanent. The FY22 Budget also amends credit eligibility with respect to production expenses. For taxable years beginning on or after January 1, 2022, a taxpayer must incur at least 75% of its production expenses in Massachusetts for a film project to qualify for the credit. A 50% threshold applies to prior taxable years.
The tax credits are available to both corporate excise and personal income tax filers and can be used to reduce the taxpayer's liability. At the taxpayer's election, the Department of Revenue will refund 90% of any amount of the tax credit that exceeds the taxpayer's liability. The tax credits may also be transferred or sold by taxpayers to third parties that may use the tax credits to reduce their Massachusetts corporate, insurance, financial institution, or personal income tax liabilities.
M.G.L. c. 63, § 38X, c. 64H, § 6(ww); c. 62, § 6(l)
77.8
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. The FY22 Budget repeals the credit effective for taxable years beginning on or after January 1, 2022. However, taxpayers will still be able to transfer previously awarded credits, and transferees will be able to apply unused amounts of the credit within five years of the credit's transfer.
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. The FY22 Budget repeals the credit effective for taxable years beginning on or after January 1, 2022. However, taxpayers will still be able to transfer previously awarded credits, and transferees will be able to apply unused amounts of the credit within five years of the credit's transfer.
M.G.L. c. 63, § 31L; c. 62, § 6½
Expired
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.
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 22810 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.
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 22810 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), (r), and (t); c.63, §§ 31M, 38M(k), 38U, 38W, 38V, and 38CC; c. 64H, § 6(xx)
19.6
2.618
Dairy Farmer Credit
Dairy Farmer 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.
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.
5.0
2.622
Certified Housing Development Credit
Certified Housing Development Credit
Corporations that invest in certified housing development projects in Massachusetts can claim a credit against the corporate excise and personal income tax. G.L. c. 63 § 38BB. The credit may be up to 25% of the cost of "qualified project expenditures" for new construction or rehabilitation of property that results in multi-unit residential housing, which contain a minimum of 80% market rate.
There is a $10 cap on the amount of credit that may be awarded under the program in a calendar year, until December 31, 2023. Beginning after that date, the cap is set to be reduced to $5 million.
The carry forward period for which the credit can be used is 10 years. In addition, the annual cap is no longer a part of the overall annual cap imposed on the Economic Development Incentive Program. For further information, see TIR 16-15.
There is a $10 cap on the amount of credit that may be awarded under the program in a calendar year, until December 31, 2023. Beginning after that date, the cap is set to be reduced to $5 million.
The carry forward period for which the credit can be used is 10 years. In addition, the annual cap is no longer a part of the overall annual cap imposed on the Economic Development Incentive Program. For further information, see TIR 16-15.
St. 2010, c. 240; M.G.L. c. 40V; 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
2.625
Cranberry Bog Renovation Credit
Cranberry Bog Renovation Credit
Effective for tax years beginning on or after January 1, 2020, taxpayers primarily engaged in cranberry production may claim a nontransferable, refundable credit equal to 25% of expenses incurred in the renovation, repair, replacement, regrading or restoration of a cranberry bog for the cultivation, harvesting or production of cranberries. The Secretary for Energy and Environmental Affairs determines eligible costs and the amount of the credit. The amount of credit that can be claimed by a taxpayer for a taxable year cannot exceed $100,000. The annual total cap amount is $2 million.
M.G.L. c. 63, § 38II
1.0
2.626
Disability Hire Credit
Disability Hire Credit
Effective for tax years beginning on or after January 1, 2023, employers that hire disabled employees may claim a nontransferable, refundable credit equal to (i) the lesser of $5,000 or 30% of the wages paid to a disabled employee in the employee's first year of employment, and (ii) the lesser of $2,000 or 30% of the wages paid to a disabled employee in each subsequent year of the employee's employment. The credit cannot reduce the excise due below the minimum excise
The credit is available to employers provided that (i) the employee is certified by the Massachusetts Rehabilitation Commission as having a disability as defined under the Americans with Disabilities Act, 42 U.S.C. § 12102; (ii) the employee is capable of working independently; (iii) the employee has a mental or physical disability that constitutes or results in a substantial impediment to employment; (iv) the employee is hired after July 1, 2021; (v) the employee's primary place of employment and primary place of residence is in Massachusetts; (vi) the employer must obtain certification from the Massachusetts Rehabilitation Commission that the employee is qualified no later than the employee's first day of work; and (vii) the employer employs the employee for at least 12 consecutive months prior to and in the taxable year in which the credit is claimed.
The credit is available to employers provided that (i) the employee is certified by the Massachusetts Rehabilitation Commission as having a disability as defined under the Americans with Disabilities Act, 42 U.S.C. § 12102; (ii) the employee is capable of working independently; (iii) the employee has a mental or physical disability that constitutes or results in a substantial impediment to employment; (iv) the employee is hired after July 1, 2021; (v) the employee's primary place of employment and primary place of residence is in Massachusetts; (vi) the employer must obtain certification from the Massachusetts Rehabilitation Commission that the employee is qualified no later than the employee's first day of work; and (vii) the employer employs the employee for at least 12 consecutive months prior to and in the taxable year in which the credit is claimed.
M.G.L. c. 63, § 38JJ
1.0
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