Information on the Maryland R&D Tax Credit: 

The Maryland R&D credit is generated from qualified research activities (QRAs) performed within the state. Qualifying activities are defined in Section 41 of the Internal Revenue Code as “a new or improved function, performance, or reliability or quality.”

Process improvement activities include:

  • Identifying uncertainty concerning the development or improvement of a business component;
  • Identifying one or more alternatives intended to eliminate that uncertainty; and
  • Identifying and conducting a process of evaluating the alternatives (e.g., through modeling, simulation, or a systematic trial-and-error methodology).

The R&D Tax Credit is a credit that is available across various industries, such as:

  • Agriculture
  • Automotive
  • Aviation
  • Biotechnology
  • Engineering
  • Farming
  • Food and Beverage
  • Logistics
  • Manufacturing
  • Oil and Gas
  • Software
  • Transportation

State Credit Name: The Basic R&D Tax Credit; and The Growth R&D Tax Credit

Expiration Date: Both credits expire January 1, 2020, but are subject to extension by the General Assembly.

Who Can Apply? Corporations and flow-through entities

Credit Carry Forward: Credits can be carried forward for 7 years, but no carry back. 

About the Credit: Maryland adopts the federal definition of QRE’s and qualified R&D.

  • The Basic R&D Tax Credit:  Credit equals 3% of QRE’s that do not exceed the Maryland Base Amount.
  • The Growth R&D Tax Credit: Credit equals 10% of QRE’s in excess of the Maryland Base Amount.

The Maryland Base Amount is determined by dividing the accumulated QRE’s by the accumulated Maryland gross receipts for the four years prior to the credit year.

If either credit exceeds $4.5 million, the tax credit is allocated. 

Notes: The business must file an application by September 15th for expenses acquired in the previous calendar year. R&D credits received after December 15, 2012 are refundable  for “small businesses” to the extent that the tax credits exceed the income tax due for that year.

Click here to find out if you qualify for the federal research tax credit.

Maryland Research and Development Tax Credit – SwansonReed


Learn more about the Maryland Research and Development Tax Credit and how it may help your business.


Contact Us

Contact your local Swanson Reed office to speak with a representative in your area today. 

Swanson Reed

300 E Lombard Street
Suite 840
Baltimore, MD 21202
T: 402-318-7996
F: 512-256-8157


Why Swanson Reed

We provide full, hands-on support from start to finish.

Are You Eligible?

Take our eligibility wizard to find out if you qualify for a tax credit.

Calculate Your Benefit

Use our quick calculator to determine your R&D tax credit benefit.

Know Your Deadline

Never miss a deadline again with our R&D Tax Credit filing deadline calculator.

For Accountants

Take advantage of our extensive database of videos, case law and recent news.

Industry Case Studies

Find out the qualifying R&D activities specific to your industry.

2019 Innovation Rankings By State

The United States is usually accredited as one of the most innovative nations in the world. However, that does not mean the country’s technological and innovation quests are divided equally [...]


DISCOVERING NEW TECHNOLOGY IS REQUIRED TO REMAIN COMPETITIVE Without investment in research and development there is no way technology firms will be able to stay competitive and survive as a [...]

Top States for Doing Business 2016

How does your state rank for doing business? CNBC ranked all 50 states for business using a range of publicly available data.  They used a points-based system for each of the 10 categories of [...]

1 2
page 1 of 2
Recent Posts