- Massachusetts General Laws (MGL) Chapter 63, § 38M – Statute establishing the Massachusetts research tax credit.
- Massachusetts Department of Revenue (DOR) – State agency administering tax laws and collection.
- Massachusetts Corporate Excise Tax (M.G.L. c. 63) – Tax on corporations for doing business in MA.
- Qualified Research Expenses (QREs) in Massachusetts – Eligible costs incurred for research in Massachusetts.
- Massachusetts Qualified Research Base Amount – Benchmark spending amount for calculating the credit.
- Fixed-Base Ratio (M.G.L. c. 63, § 38M(a)) – Ratio of aggregate QREs to gross receipts.
- Average Annual Gross Receipts (4 preceding tax years) – Average receipts used to calculate base amount.
- Credit Percentage (10% of Excess QREs) – Rate applied to QREs exceeding the base.
- Basic Research Payments (BRP) – Payments to universities for scientific research.
- BRP Credit Percentage (15% of BRP) – Credit rate for basic research payments.
- Internal Revenue Code (IRC) § 41 – Federal law defining qualified research activities.
- IRC § 41 as in effect on August 12, 1991 (Traditional Method) – Federal conformity date for MA Traditional calculation.
- IRC § 41 as in effect on January 1, 2014 (Alternative Method) – Federal conformity date for MA ASC calculation.
- Regular Method (for Credit Calculation) – Standard calculation using fixed-base percentage.
- Alternative Simplified Credit (ASC) (M.G.L. c. 63, § 38M(b)) – Optional method using last three years’ QREs.
- ASC Calculation: 50% of Average QREs (3 prior years) – 10% credit on QREs exceeding 3-year average.
- Nonrefundable Credit – Credit reduces tax but offers no refund.
- Carryover Period (15 Taxable Years for unused) – Unused credits can be carried forward 15 years.
- Indefinite Carryover (for credits disallowed by § 38M(d)) – Unlimited carryforward for credits limited by statutory cap.
- Liability Cap ($25,000 plus 75% of excess excise) – Maximum credit usage allowed per tax year.
- Minimum Tax ($456 or other statutory minimum) – Minimum corporate tax owed regardless of credits.
- Schedule RC (Research Credit Form) – Tax form used to claim research credit.
- S Corporation (Credit applies at entity level) – Credit flows through to S-Corp shareholders.
- Pass-Through Entities (PTEs) – Business structures passing income and credits to owners.
- Aggregated Group (Controlled Group/Common Control) – Related entities treated as single taxpayer.
- 830 CMR 63.38M.1 (Massachusetts Research Credit Regulation) – Administrative regulation detailing research credit rules.
- Defense Related Activities (Expanded Definition) – Broader eligibility for defense-related research projects.
- Qualified Research Activity (must be conducted in Massachusetts) – Research work physically performed within Massachusetts.
- Wages for Qualified Services (Performed in Massachusetts) – Salaries paid for research work in MA.
- Supplies Used or Consumed (in Massachusetts) – Materials consumed during research process in MA.
- Contract Research Expenses (Prorated in Massachusetts) – Payments to third parties for MA research.
- Technical Information Release (TIR) (DOR Guidance) – Official guidance published by the Department of Revenue.
- Combined Reporting (M.G.L. c. 63, § 32B) – Filing method for unitary business groups.
- Credit Generated by an Individual Member Corporation – Credit earned by specific entity in group.
- Excise Attributable to That Company (for Combined Return) – Tax liability specific to one group member.
- Excess Research and Development Credit (Transfer between members) – Unused credits shared among combined group members.
- Life Sciences Center (MLSC) Tax Incentive Program – Special incentives for certified life sciences companies.
- Certified Life Sciences Company – Business approved by MLSC for tax benefits.
- MGL c. 63, § 38W (Life Sciences Research Credit) – Specific credit for life sciences research activities.
- Life Sciences Refundable § 38M Research Tax Credit – Refundable version of credit for life sciences.
- 90% of Balance (Refundable Portion Limit) – Percentage of credit refunded to life sciences.
- Qualifying Health Insurance Premium Expenditure Credit – Credit for health premiums paid by employers.
- MGL c. 63, § 38SS (Climatetech Tax Incentive Program R&D) – Incentives for climate technology research and development.
- Climatetech Tax Incentive Program – Program supporting climate-related technology businesses.
- Election of ASC (Longer-term choice) – Choosing ASC binds taxpayer for future years.
- Fixed-Base Ratio (Maximum Limit 16%) – Cap on the fixed-base percentage calculation.
- Corporate Excise Due (Before Credits) – Total tax liability prior to applying credits.
- Tangible Property Used in Manufacturing (Related Chapter 63 Term) – Assets qualifying for specific manufacturing tax treatment.
- Qualified Services (IRC § 41(b)(2)(B)) – Tasks directly related to qualified research.
- Taxpayer Not Eligible to Compute Under § 38M(a) – Entity failing requirements for standard credit calculation.
