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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
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
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.