R&D Tax Credits in Massachusetts

Can I Claim R&D Tax Credits in Massachusetts?

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


The Massachusetts R&D Tax Credit presents a golden chance for businesses to maximize tax savings while investing in research and development. Similar to the federal research credit, this credit requires companies to meet specific criteria to qualify for a refund. Starting in 2018, businesses have the option to use a simpler method for calculating the research credit, resembling the federal credit for qualified research expenses. By opting for the Massachusetts R&D Tax Credit, businesses can unlock substantial tax savings and allocate resources towards research and development, bolstering their competitive advantage and fostering innovation in their industries.

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

  • Tax Savings
  • Increased Cash Flow
  • Carryforward provisions
  • Economic Growth and Industry Development


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Who Can Claim the Massachusetts R&D Tax Credit?

The Massachusetts R&D Tax Credit encourages businesses in the state to invest in research and development, promoting innovation and economic growth. It applies to both large and small companies engaging in qualifying research activities. Eligible entities include C-corporations, S-corporations, partnerships, LLCs, and sole proprietorships. For partnerships and LLCs classified as partnerships, the credit passes through to the partners or members who can claim it on their individual tax returns. Sole proprietors can also claim the credit on their personal income tax returns if they meet the eligibility requirements.

The activities that qualify for the Massachusetts R&D tax credit align closely with the activities that are fueling growth in your business.

  • Product Innovation
  • Enhancing Competitiveness
  • Software Development
  • Streamlining Manufacturing

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

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How Much Massachusetts R&D Tax Credit Can I Claim?

The Massachusetts R&D tax credit enables businesses to claim up to 10% of excess qualified research expenses (QREs) and 15% of basic research payments. Utilizing this credit allows substantial tax savings, which can be reinvested in innovation. The credit is determined by corporate excise due, capped at $25,000.

Companies can receive a credit of up to $25,000 in corporate excise, plus 75% of any additional excise due, or the lesser of $25,000 or 75% of excess excise due. The credit applies to the first $25,000 of corporate excise due, with an additional 75% of any extra excise eligible.