Applications for Tax Year 2024 will be available on the online portal beginning June 1, 2025 through November 15, 2025.
Businesses that have qualified R&D expenditures in Maryland may qualify for the R&D Tax Credit.
The tax credit remains in effect until June 30, 2027, subject to extension by the General Assembly.
BENEFIT
The tax credit is equal to ten percent (10%) of eligible R&D expenses incurred during the taxable year in excess of the Maryland Base Amount. If the total credits applied for exceed the statutory caps, the business's R&D tax credit is prorated. The total statutory cap is $12 million with a small business set-aside of $3.5 million. A single applicant may not receive a tax credit exceeding $250,000.
ELIGIBILITY
The Maryland Department of Commerce (Commerce) follows the federal definition of qualified R&D and qualified R&D expenses. To qualify the business must incur Qualified Research and Development Expenses, as defined by § 41(b) of the Internal Revenue Code, in Maryland. The business must submit an application to Commerce by November 15th for expenses incurred in the previous calendar year.
A small business means a for profit corporation, limited liability company, partnership or sole proprietorship with net book value assets totaling, at the beginning or the end of the taxable year for which the Maryland Qualified Research and Development expenses are incurred, as reported on the balance sheet, less than $5,000,000.
Small Business Refund
R&D tax credits certified after December 15, 2012 are refundable for small business to the extent that the tax credits exceed the income tax liability for that taxable year.
APPLY
RESOURCES
Maryland Code, Tax-General § 10-721
CONTACT
For more information about the R&D Tax Credit contact:
Amy PoadTax SpecialistDepartment of Commerce401 E. Pratt StreetBaltimore, MD 21202Amy.Poad@maryland.gov410-767-0429
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