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The Maryland Research and Development Tax Credit, administered by the Maryland Department of Commerce, incentivizes businesses to invest in qualified research activities conducted within the state, providing income tax offsets for eligible expenses exceeding a calculated base amount. Extended through June 30, 2027, the program supports innovation in sectors like biotechnology, manufacturing, and technology, with a total annual cap of $12 million ($3.5 million reserved for small businesses).
Credits are available to businesses conducting qualified research in Maryland, aligned with federal standards under IRC §41. Eligibility focuses on the nature of activities and in-state expenses.
Maryland uses a single incremental method based on state-sourced data, requiring calculation of a base amount tied to prior years' ratios. Only Maryland QREs and gross receipts qualify.
Maryland's program emphasizes certification and caps to manage resources, with tailored benefits for small businesses and high-tech sectors.
The Maryland Research and Development Tax Credit provides a 10% credit on qualified research expenses exceeding the state base amount, certified by the Department of Commerce, with a $12M annual cap and refundability for small businesses.
Activities must meet federal IRC §41 criteria—technological uncertainty, experimentation, and improvement in products/processes—conducted in Maryland. Examples include software development or prototype testing. Strike Tax verifies eligibility.
For $2M in excess QREs, you could save $200,000, plus federal credits. Small businesses may get full refunds. Use Strike Tax’s R&D Credit Calculator for personalized estimates.
Yes, credits certified after 2012 are fully refundable for small businesses (<$5M net book assets) exceeding tax liability. Non-small businesses carry forward 7 years. Strike Tax maximizes cash flow.
Submit an online application to the Maryland Department of Commerce by November 15 post-tax year, including QRE/GR data. Receive certification by February 15, then claim on returns. Strike Tax handles documentation.
Yes, stack state and federal for the same in-state QREs to amplify savings. Maryland follows IRC §41, so documentation aligns. Strike Tax optimizes dual claims.
Base = (avg prior QREs over 4 preceding years / avg prior GR over same period) × avg prior GR. First-year base is $0; partial years adjusted by days/365. Strike Tax computes accurately.
Credits prorated if total applications exceed caps ($8.5M non-small, $3.5M small). Max $250K per firm. Proration based on total by deadline; Strike Tax advises timing.
Project descriptions, employee time logs, expense invoices, and GR reports for base. Retain 4 years for audits. For federal claims, especially refunds, IRS expects business component detail; Form 6765 Section G is optional in 2025 but mandatory for many in 2026. Strike Tax ensures compliance.
High QREs in experimentation qualify easily, with refunds for startups and 7-year carryforward for growth. The program routinely allocates the full cap, heavily utilized by life sciences. Strike Tax tailors for MD tech/biotech.
Use our calculator to estimate your potential federal and state benefits
Schedule a consultation to structure your row crop research activities
Connect with us to find out how R&D tax credits can boost your organization’s bottom line.
Businesses that have qualified R&D expenditures in Maryland may qualify for two separate income tax credits, the Basic R&D Tax Credit and the Growth R&D Tax Credit. To qualify for the Basic and/or Growth R&D tax credit, a business must submit an application NO LATER THAN November 15th of the calendar year following the tax year in which the expenses were incurred.
In addition, the credits are refundable for eligible small businesses that submit documentation showing they had net book value assets at the beginning or end of the tax year of less than $5 million (as reported on the balance sheet).
Applicants must apply using an online system. Maryland has a yearly cap on the amount of R&D credits available to applicants. Maryland's Commerce Department will prorate the R&D credits pro rata in the following circumstances:
Each taxpayer (applicant) will receive an R&D credit Certification Letter with the approved credit amount by February 15th of the following year.
Because application dates follow the filing date for taxes, after receiving the Certification Letter, the taxpayer can file an amended tax return for the certified year, or it may claim the credit on any income tax return filed in any of the subsequent 7 tax years. The business must attach a copy of the Certification Letter to its Maryland income tax return.
The tax credit as been extended until June 30, 2027 by the Maryland General Assembly.
Learn more about Maryland's R&D Tax Credit law here.
R&D Tax Credit Available:
Yes - Expires on June 30, 2027
Eligible Entities:
C-Corporations, S-Corporations, LLCs, Partnerships
Deadline for Tax Filing:
Application due by 11/15 using Commerce's online system
Data Required to Compute Credit:
Claim Period Qualified R&D Expenses (QREs)
What Information is needed?
QREs for Prior 4 Years
Gross Receipts for Prior 4 Years
Credit Carryforward:
Refundable Credit for Small Businesses
20-year carry forward for unused credits
To get an estimate of the potential value of your unclaimed R&D Tax Credits, try out our credit calculator.
Download our R&D Tax Credit Calculator for Android to see how much you can receive from your qualified R&D tax credit expenses.
The Maryland Research and Development Tax Credit provides a 10% credit on qualified research expenses exceeding the state base amount, certified by the Department of Commerce, with a $12M annual cap and refundability for small businesses.
Activities must meet federal IRC §41 criteria—technological uncertainty, experimentation, and improvement in products/processes—conducted in Maryland. Examples include software development or prototype testing. Strike Tax verifies eligibility.
For $2M in excess QREs, you could save $200,000, plus federal credits. Small businesses may get full refunds. Use Strike Tax’s R&D Credit Calculator for personalized estimates.
Yes, credits certified after 2012 are fully refundable for small businesses (<$5M net book assets) exceeding tax liability. Non-small businesses carry forward 7 years. Strike Tax maximizes cash flow.
Submit an online application to the Maryland Department of Commerce by November 15 post-tax year, including QRE/GR data. Receive certification by February 15, then claim on returns. Strike Tax handles documentation.
Yes, stack state and federal for the same in-state QREs to amplify savings. Maryland follows IRC §41, so documentation aligns. Strike Tax optimizes dual claims.
Base = (avg prior QREs over 4 preceding years / avg prior GR over same period) × avg prior GR. First-year base is $0; partial years adjusted by days/365. Strike Tax computes accurately.
Credits prorated if total applications exceed caps ($8.5M non-small, $3.5M small). Max $250K per firm. Proration based on total by deadline; Strike Tax advises timing.
Project descriptions, employee time logs, expense invoices, and GR reports for base. Retain 4 years for audits. For federal claims, especially refunds, IRS expects business component detail; Form 6765 Section G is optional in 2025 but mandatory for many in 2026. Strike Tax ensures compliance.
High QREs in experimentation qualify easily, with refunds for startups and 7-year carryforward for growth. The program routinely allocates the full cap, heavily utilized by life sciences. Strike Tax tailors for MD tech/biotech.
