R&D Tax Credits in Maine

Can I Claim R&D Tax Credits in Maine?

Yes, you can claim R&D tax credits in Maine. The state offers a research and development tax credit program known as the Research Expense Tax Credit.


The Research and Development Tax Credit (R&D) is a valuable tax credit available to businesses of all sizes in the United States that engage in research and development activities. This tax credit is not limited to scientists and research labs, but is applicable to a wide range of industries and businesses. The R&D tax credit was introduced to encourage research and development in the United States. It has become increasingly popular among companies, with a growing number of businesses taking advantage of this tax credit each year. In 2015, the Protecting Americans from Tax Hikes (PATH) Act ensured that the R&D tax credits became permanent and also extended the benefit to startups.

What are the Potential Benefits of the R&D Tax Credit?

Eligible companies can achieve significant cost savings through the utilization of R&D tax credits. These benefits include:

  • Increasing Cash Flow
  • Federal and State Dollar-for-Dollar Income Tax Reduction
  • Claim Credits for Open Tax Years Going Back 3-4 Years
  • Reducing Your Tax Rate


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Who Can Claim the R&D Tax Credit?

There was a prevailing misconception that R&D tax credits were only applicable to individuals in lab coats or those involved in pioneering product development. Contrary to this belief, the R&D credit encompasses a wider range than commonly understood.

Companies, regardless of size or industry, can meet the federal government's requirements for qualified innovation activities and claim Research and Development (R&D) Tax Credits. Yet, many of these companies are unaware of their eligibility, and consequently, a significant number are failing to take advantage of valuable federal and state R&D tax credits.

The activities that qualify for the R&D tax credit are the same ones driving growth in your business.

  • Developed new products
  • Improved existing products
  • Developed software for internal or external use
  • Improved manufacturing processes

The activities that qualify for the Maine R&D tax credit are the same ones driving growth in your business.

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How Do I Claim the R&D Tax Credit?

Companies can claim 7-10% of their qualified expenses as a federal R&D tax credit. Let's say you're a software developer, engineer, or lab technician earning $100,000 a year. By leveraging this credit, you could potentially save up to $10,000 in taxes.

To support your company's research activities, eligible expenses usually consist of employee compensation, materials, and contracted services. You can provide various types of documentation to prove these qualified expenses, including payroll records, financial records indicating supply or contract research expenses, and vendor invoices.