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Cellulosic Ethanol Technology R&D Tax Credit

Businesses that incur qualified cellulosic ethanol technology research and development expenses in Maryland may be entitled to a state income tax credit. For a business to be eligible, it must apply to and be certified to be eligible.

The tax credit is an income tax credit for individuals or businesses that invest in cellulosic ethanol technology. The total credit depends on the amount of eligible expenses incurred with a limit of $250,000 for all businesses that apply. The credit is 10% of the “qualified research and development expenses” paid or incurred by an individual or corporation during the previous tax year.

To qualify, a business must submit an application to DBED no later than September 15 of the calendar year following the tax year in which the expenses were incurred. DBED is required to certify the amount of the credit by December 15, following the submission date. Eligible expenses are restricted to "qualified research and development expenses." This means expenses paid or incurred for cellulosic ethanol technology research and development that is conducted in the State. Cellulosic ethanol technology is defined as technology that is used to develop cellulosic biomass for conversion to ethanol fuel.

Application date follows tax filing dates. Submit annual tax return as though there were no Maryland CETR&D tax credit. To claim the credit, the business entity will file an amended return and attach a copy of DBED’s certification to the amended return. If the tax credits exceed the tax imposed for that year, the credits may be applied against following years’ taxes until the credit is used or 15 years have passed. Credits may not be used against prior years’ tax liabilities.

Tax year 2013 applications must be submitted by September 15, 2014.

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