2.600 Credits Against Tax

Credits Against Tax

2.600

1,042.2

1,170.0

1,302.0

1,514.4

1,726.8

Download the data

2.602
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)

135.1

2.603
Vanpool Credit

The tax expenditure allows business corporations a credit equal to 30% of the cost of company shuttle vans used in Massachusetts in an employer-sponsored ridesharing program. The credit applies to the cost of purchasing or leasing the shuttle vans. The shuttle vans must be used for transporting employees to and from the workplace. The credit is neither transferable nor refundable and cannot be carried forward. Recapture provisions apply to vans that are taken out of vanpool service before the end of their useful lives. If the credit did not exist, the cost of acquiring vans used in vanpools would be borne entirely by employers, who might then be less inclined to provide their employees with vanpool services. The amount of revenue foregone as a result of the credit constitutes a tax expenditure.

M.G.L. c. 63, §31E

Negligible

2.604
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 and a certified Climatetech company may apply to the Massachusetts clean energy 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.

M.G.L. c. 63, § 38M

1,054.2

2.605
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. 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

29.7

2.606
Credit for Employing Former Full-Employment Program Participants

This tax expenditure is no longer in effect. It previously provided a tax credit for employers who continued to employ former participants in the full employment program adopted by the Department of Transitional Assistance (DTA). The program subsidized the salaries of certain disadvantaged individuals. The credit was equal to $100 per month for each month of non-subsidized employment, up to a maximum of $1,200 per employee, per year, for each employee retained after DTA subsidies ceased. The credit was required to be authorized by the DTA. The credit was neither transferable nor refundable. The reduction of revenue resulting from the credit constituted a state tax expenditure. The full employment program was created by St. 1995, c. 5, § 110(m) but was never codified into the General Laws. The law authorizing the program was never repealed, but the DTA stopped authorizing the credit in 2016 . Because the credit may be carried forward for only a maximum of five years, no carryover of the credit can apply after 2021. As a result of these circumstances, this tax expenditure is not active.

St. 1995, c. 5, §110(m)

Not Active

2.607
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.

M.G.L. c. 63, §38P

Expired

2.608
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. The environmental response action must be commenced on or before August 5, 2028, and eligible costs that qualify for the credit must be incurred before January 1, 2029. 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.

26.5

2.609
Low Income Housing Credit

The Low-Income Housing Tax Credit (LIHTC) is available to corporate excise taxpayers as well that invest in low-income housing projects that meet federal and state eligibility rules. The credit is part of a federal program that authorizes a federal credit for such investments and subsidizes state credits for eligible projects. The Executive Office of Housing and Livable Communities (EOHLC) DHCD), determines eligibility for, and the amount of, the Massachusetts credit pursuant to federal guidelines. The LIHTC has two components. First, the Standard LIHTC is allowed for the construction or development of new low-income housing or the preservation and improvement of existing federal or state subsidized housing. Second, the Donation LIHTC is allowed for the donation of real or personal property to non-profit entities for use in purchasing, constructing, or rehabilitating housing projects otherwise eligible for the LIHTC. The amount of credit that Massachusetts taxpayers may claim is determined by the EOHLC, subject to the rules set out in Internal Revenue Code (Code) § 42. Under those rules the amount of the Standard LIHTC is based on a number of factors, including the cost of the project. The Donation LIHTC is generally equal to 50% of the value of the donation, but the EOHLC can increase that amount to 65% if necessary for the viability of a specific project. To qualify for the credit, a project must meet affordability standards set out in Code § 42. Effective January 1, 2023, the Massachusetts LIHTC is subject to an annual statewide cap of $60 million. EOHLC allocates the credit to taxpayers in accordance with federal and state law. The LIHTC can be used to offset the entire Massachusetts tax liability of a personal income taxpayer and all the tax liability of a corporate taxpayer except for the $456 minimum excise. Unused Standard LIHTC can be carried over for five years. However, the Donation LIHTC must be used in the taxable year that the donation is made. If the taxpayer disposes of the property generating the LIHTC, a portion of the credit may be subject to recapture. The Massachusetts LIHTC is transferable.

M.G.L. c. 63, §31H

214.4

2.610
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 original annual cap was set at $15 million per year, effective for taxable years beginning January 1, 2005 and ending December 31, 2009. Then it increased to $50 million per year, for taxable years beginning January 1, 2017 and ending December 31, 2022. However, it soon again changed to $55 million per year, effective for taxable years beginning January 1, 2018 and ending December 31, 2022. The FY22 Budget extend the credit to tax years ending on or before December 31, 2027. Recently, for taxable years beginning on or after January 1, 2024, the annual cap has been increased to $110 million. The credit has been extended further to taxable years ending on or before December 31, 2030. 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.

M.G.L c. 63, §38R

84.8

2.614
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.

M.G.L. c. 63, §38X

78.0

2.615
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.

M.G.L. c. 63, §31L

Expired

2.617
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). The Angel Investor Tax Credit was added to the ambit of life sciences tax incentives (St. 2016, c. 219, § 139) ), but is no longer available for taxable years beginning on or after January 1, 2024. 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 was 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 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. Effective for taxable years beginning on or after January 1, 2024, the annual amount of life science tax incentives that can be authorized has been increased from $30,000,000 to $40,000,000.

M.G.L. c.63, §§31M, 38M(k), 38U, 38W, 38V, and 38CC

17.0

2.618
Dairy Farmer Credit

A taxpayer who holds a certificate of registration as a dairy farmer pursuant to M.G.L. Ch. 94, § 16A is allowed to take a refundable tax credit based on the amount of milk produced and sold. 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. Effective January 1, 2023, the total cumulative value of the credits authorized pursuant to this section combined with M.G.L. c. 63, § 38Z is $8 million. These credits may not be sold or transferred to another taxpayer, but are fully refundable. See personal income tax item 1.614 for more details.

M.G.L. c. 63, §38Z

1.5

2.619
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.

M.G.L. c. 63, §38AA

0.0

2.620
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.

St. 2012, c. 224, §§41, 41A, 56, 56A, 238, 239, 297, and 298; M.G.L. c. 63, §38FF

0.1

2.621
Community Investment Credit

A personal income tax and corporate excise credit equal to 50% of the total amount of qualified investments made by a taxpayer in a "community partner." A Qualified investment is a cash contribution made to: (i) a specific community partner to support the implementation of the community partner's approved community investment plan, or (ii) a community partnership fund. Community partners include "community development corporations" and "community support organizations" selected by the Executive Office of Housing and Livable Communities (EOHLC) through a competitive process. A "community partnership fund" is a fund administered by a nonprofit organization selected by the EOHLC to receive qualified investments from taxpayers for the purpose of allocating the investments to community partners. A "community development corporation'' is a non-profit corporation dedicated to improving the economic well-being of communities in the Commonwealth, as certified by the EOHLC. A ''community support organization'' is any nonprofit organization which is not a community development corporation "but has a focus on and track record of providing capacity building services to community development corporations." A qualified investment must be in the form of a cash contribution of at least $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 EOHLC is mainly responsible for administering the credit. The EOHLC determines whether an organization is a community partner and decides whether projects proposed by community partners will be eligible for the credit. The total cumulative value of all credits authorized may not exceed $12 million in any taxable beginning in 2023 or later. Prior limits were $10 million for 2021 and 2022 taxable years, $8 million for 2019 and 2020 taxable tears, $6 million for 2015 through 2018 taxable years, and $3 million for 2014 taxable years. For taxable years beginning on or after January 1, 2025, the annual cap has been increased from $12 million to $15 million. The credit was due to expire on December 31, 2025, but has been made permanent. The amount of revenue foregone as a result of the credit constitutes a tax expenditure.

St. 2012, c. 238, §§29, 30, 35, 36 ; M.G.L. c. 63, § 38EE

6.5

2.622
Certified Housing Development Credit

A tax credit is allowed for up to 25% of qualified expenditures in certified housing development projects. The credit is administered by the Executive Office of Housing and Livable Communities (EOHLC). The EOHLC determines the amount of the credit to which a taxpayer is entitled. Qualified expenditures are those costs directly related to the construction or substantial rehabilitation of residential property located in designated areas of gateway municipalities. Qualified expenditures do not include the initial purchase price of the property. To be considered a certified housing development a project must meet a number of requirements. Specifically, the project must contain two or more housing units. In addition, 80% of the units contained in the project must be priced consistently with prevailing rents or sale prices in the city or town where the property is located. Finally, the city or town must have adopted full or partial property tax exemptions for projects that are otherwise eligible for the credit. A taxpayer can claim a credit equal to the amount awarded by the EOHLC. The total amount of credits awarded in the Commonwealth cannot exceed $57 million for calendar year 2023 and $30 million for subsequent years. The credit is available for the tax year in which the EOHLC gives the Department of Revenue (DOR) written notification of completion of the certified housing development project. The credit may be claimed against the full amount of the recipient's tax liability, except that corporations may not use the credit to offset the $456 minimum excise. Unused credits may be carried forward for ten years. Taxpayers are allowed to sell their credits to third parties. The amount of revenue foregone as a result of the credit constitutes a tax expenditure.

St. 2010, c. 240; M.G.L. c. 40V; c. 63, §38BB

16.0

2.623
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. For taxable years beginning on or after January 1, 2024, the amount of credit a business can claim for each qualified veteran it hires has been increased from $2,000 to $2,500. 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 million 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.

St. 2017, c. 47; M.G.L. c. 63, §38GG

0.5

2.624
Apprentice Credit

The tax expenditure allows employers to claim a credit against the personal income tax or corporate excise if they establish apprenticeship programs and hire apprentices in designated computer technology, health care technology, or manufacturing occupations. A tax credit is a dollar for dollar offset of the amount of tax that a taxpayer owes. The credit is equal to the lesser of $4,800 or 50% of the wages paid to the apprentice. Employers that claim the credit in a taxable year will be eligible for an additional credit in the following year with respect apprentices that are retained. Apprentices must be Massachusetts residents working for employers with business premises in the Commonwealth. The credit is refundable but nontransferable. The credit applies to taxable years beginning on or after January 1, 2019. Occupations eligible for the credit include a range of jobs in the designated fields. Such occupations generally include jobs that require technical skills but do not necessarily require post-secondary education. To be eligible for the credit, employers must register their apprenticeship programs and program participants with the Massachusetts Executive Office of Labor and Workforce Development, Division of Apprentice Standards. The amount of the credit available to any employer is determined by the Secretary for Labor and Workforce Development in consultation with the Massachusetts Executive Office for Administration and Finance. The total amount of cumulative credit available annually is limited to $2.5 million. Effective from January 1st, 2023, the credit has been extended to apprentices hired and trained by expansion industries identified by the Secretary of Labor and Workforce Development as critical to a regional labor market economy. The credit is a Massachusetts tax expenditure because it reduces the amount of personal income tax and corporate excise revenue that would otherwise be available to appropriate for other purposes.

St. 2018, c. 228; M.G.L. c. 63, §38HH

0.5

2.625
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. The credit is no longer available for taxable years beginning on or after January 1, 2030.

M.G.L. c. 63, §38II

1.0

2.626
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.

M.G.L. c. 63, §38JJ

1.0

2.627
Offshore Wind Tax Incentive Program

The Massachusetts offshore wind tax incentive program consists of two tax credits, a Wind Power Incentive Jobs Credit and a Wind Power Incentive Investment Credit, for offshore wind companies subject to either the personal income tax or the corporate excise. The credits are available to certified offshore wind companies only to the extent authorized by the Massachusetts Clean Energy Technology Center (the "Center"), may be claimed starting with taxable years beginning on or after January 1, 2023, share an annual cap of $35 million, are subject to recapture in the event that the offshore wind company's certification is revoked by the Center, and expire on January 1, 2033. The Wind Power Incentive Jobs Credit is available to certified offshore wind companies that commit to the creation of a minimum of 50 net new permanent full-time employees in Massachusetts.Effective for taxable years beginning on or after January 1, 2024, certified offshore wind companies must commit to the creation of a minimum of 10 net new permanent full-time employees in Massachusetts. Where the credit exceeds the taxpayer's liability for the taxable year, 90 percent of such excess credit may be refunded to the taxpayer. Excess credit amounts cannot be carried forward to subsequent taxable years. The Wind Power Incentive Investment Credit is available for certified offshore wind companies that make a capital investment in an offshore wind facility that they either own or lease in an amount up to 50 percent of such investment. The total amount of the credit awarded is distributed in equal parts over five taxable years that correspond to the period in which the offshore wind company is certified. Eligibility requirements vary depending on whether the certified offshore wind company owns or leases the offshore wind facility, but, in general, the certified offshore wind company must demonstrate to the Center that (i) it has a total capital investment in an offshore wind facility that equals not less than $35 million; and (ii) the offshore wind facility must employ not less than 200 new full-time employees by the fifth year of the offshore wind company's certification. A certified offshore wind company claiming this credit may not also claim the Wind Power Incentive Jobs Credit or the Economic Development Incentive Program Credit provided by M.G.L. c. 63, § 38N in the same taxable year.

M.G.L. c. 23J, §8A; M.G.L. c. 63, §§38LL; 38MM

7.3

2.628
National Guard Credit

A business corporation employing not more than 100 employees may be allowed a credit equal to $2,000 for each member of the Massachusetts national guard hired by the business corporation. To be eligible for a credit: (i) the primary place of employment and the primary residence of the member of the Massachusetts national guard must be in Massachusetts; and (ii) not later than the day an individual begins work, the business corporation shall have obtained the applicable certification from the office of the adjutant general that the individual is a member of the Massachusetts national guard. A business corporation that claims this credit is eligible for a second credit of $2,000 in the subsequent taxable year with respect to such member of the Massachusetts national guard, subject to certification of continued employment during the subsequent taxable year. The credit is nontransferable and nonrefundable. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward to any of the three subsequent taxable years. For business corporations subject to a minimum corporate excise, the credit cannot reduce the business corporation's excise liability below the minimum corporate excise amount. The personal income and corporate excise versions of this credit are subject to the same annual cap of $1 million.

M.G.L. c. 63, §38KK; St.2022, c.154, §8

0.1

2.629
Temporary Authorized Training Credit for Emergency Assistance

Starting with taxable years beginning on or after January 1, 2024, business corporations taxable under G.L. c. 63 that provide training to a qualified trainee through an authorized training program may claim a temporary authorized training tax credit for emergency assistance. A qualified individual is an individual receiving benefits through the emergency housing assistance program pursuant to G.L. c. 23B, § 30. To qualify for the credit, a taxpayer must (1) have a place of business in the Commonwealth; (2) conduct an authorized training program in the Commonwealth that is in compliance with recommendations of the Executive Office of Labor and Workforce Development ("EOLWD"); (3) enroll the qualified trainee in an authorized training program on or after April 30, 2024; and (4) meet any additional requirements determined by the Executive Office for Administration and Finance and EOLWD. The credit is equal to $2,500 for each qualified trainee that receives the training from the entity. The amount of the credit that exceeds the tax due for a taxable year may be carried forward to the subsequent taxable year. The credit is subject to an annual cap of $10 million. The credit may no longer be claimed as of (1) January 1, 2026; or (2) the taxable year in which the end of the capacity limitation on the emergency shelter assistance program occurs, whichever is sooner. See TIR 24-7 for more information.

M.G.L. c. 63, § 38NN

8.0

2.630
Massachusetts Homeownership Credit

Starting with taxable years beginning on or after January 1, 2025, taxpayers subject to tax under G.L. c. 63 may claim a Massachusetts homeownership tax credit in relation to a qualified homeownership development project to the extent authorized by the Executive Director of the Massachusetts Housing Finance Agency ("MHFA"). The credit is non-refundable but is transferrable. The amount of the credit authorized by MHFA cannot exceed the maximum credit amount, which is 35% of the lesser of either: (1) the project's total qualified project expenditures calculated on a per single-family dwelling basis; or (2) 80% of the area median new single-family dwelling sales price, subject to further limitations established by MHFA. A sponsor cannot claim the credit before the first taxable year stated on the eligibility certificate issued to the sponsor by MHFA. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward for the duration of the qualified homeownership development project's affordability period, which is a 10-year period that begins as of the date of the first sale of a single-family dwelling that was constructed as part of the project. The credit is subject to recapture if MHFA determines that a sponsor or qualified homeownership development project does not qualify for the credit, ceases to qualify for the credit, or did not qualify for the credit at the time they claimed the credit. The amount of credits that MHFA can authorize annually cannot exceed the sum of (1) $10 million; (2) any credit amounts not authorized in the preceding taxable year; and (3) any credits returned to MHFA by a sponsor. Effective January 1, 2030, the amount of credits that can be authorized annually is the sum of (1) any credit amounts not authorized in the preceding taxable year; and (2) any credits returned to MHFA by a sponsor.

M.G.L. c. 63, § 38PP

8.0

2.631
Qualified Conversion Project Credit

Starting with taxable years beginning on or after January 1, 2025, taxpayers subject to tax under G.L. c. 63 may claim a refundable, non-transferable qualified conversion credit in relation to a qualified conversion project that has been certified by the Executive Office of Housing and Livable Communities ("EOHLC"). To claim the credit, a sponsor must submit a project proposal to EOHLC requesting the certification of a housing development project as a qualified conversion project. After certifying the project, EOHLC determines the amount of credit awarded to the sponsor, which cannot exceed 10% of the qualified conversion's project's development costs. The credit is allowed for the taxable year in which EOHLC notifies the Commissioner of the certified qualified conversion project's completion. Any amount of the credit that exceeds the tax due for a taxable year may be carried forward to any of the 10 taxable years subsequent to the taxable year that the credit was allowed. The credit is subject to recapture. The credit is no longer available for taxable years ending after December 31, 2029.

M.G.L. c. 63, § 38OO

9.0

2.632
Climatetech Tax Incentive Program

Massachusetts provides a climatetech tax incentive program, which is administered by the Massachusetts clean energy center ("CEC"), in consultation with DOR. The tax incentives consist of three tax credits, the climatetech capital investment tax credit, a refundable climatetech jobs tax credit, and a climatetech qualified research expenses tax credit; as well as a sales and use tax exemption for purchases of tangible personal property to be used for the construction of research, development or manufacturing or other commercial climatetech facilities. The incentives all share an annual cap of $30 million and are effective for taxable years beginning on or after January 1, 2024. The climatetech capital investment tax credit is a refundable tax credit available to personal income and corporate excise taxpayers who make capital investments in a climatetech facility. The amount of the credit is determined by the CEC, but cannot exceed 50% of the owner's total capital investment in the facility. The climatetech qualified research expenses tax credit is available to corporate excise taxpayers. The credit amount is based on the taxpayer's qualified research expenses in a manner similar to the standard research expense tax credit. The credit is not refundable, but unused amounts of the credit may be carried forward to the next subsequent 15 taxable years.

M.G.L. c. 63, § 38RR; M.G.L. c. 63, § 38SS

24.0

2.633
Live Theater Credit

The live theater tax credit program is administered by the Massachusetts Office of Business Development, in consultation with DOR. The credit is available to personal income and corporate excise taxpayers. The amount of the credit cannot exceed $7 million and is equal to (1) 35% is of the total in-state payroll costs; (2) 25% of production and performance expenditures; and (3) 25% of transportation expenditures. The credit is not refundable, but is transferrable. Any unused amount of credit may be carried forward to the next 5 taxable years. The annual amount of credits that can be authorized cannot exceed $7 million. The credit is effective for taxable years beginning on or after January 1, 2025 and expires on January 1, 2030.

M.G.L. c. 63, § 38QQ

3.5

2.634
Qualified Internship Credit

The qualified internship tax credit is available to personal income and corporate excise taxpayers that hire a qualified intern. The credit is equal to the lesser of $5,000 or 50% of the wages paid to the intern. The annual amount of credits that can be authorized cannot exceed $10 million. A single employer cannot claim more than $100,000 in credits in a taxable year. The credit is effective starting the taxable year beginning on or after January 1 of the first calendar year following the next fiscal year that closes after November 20, 2024 with a consolidated net surplus of at least $400 million. The credit expires on January 1 of the sixth tax year following the effective date of the credit.

M.G.L. c. 63, § 38UU

N.A.

Download the data