Research and Development Tax Credit

Businesses with qualified research and development expenses in Maryland are entitled to a tax credit if eligible and certified by DBED.

Basic R&D Tax Credit

3% of eligible R&D expenses in excess of the firm’s average R&D expenses over the last four years.  Total credit claimed exceeds $3 million, the tax credit is prorated.

Growth R&D Tax Credit

10% of eligible R&D expenses that exceed the average R&D expenses over the last four years.  Total credits claimed exceeds $3 million, the Growth R&D tax credit is prorated.

To qualify for the Basic and Growth R&D tax credit, a business must submit an application NO LATER THAN SEPTEMBER 15th of the year following the tax year the expenses were incurred.  DBED certifies the amount of R&D tax credits approved by December 15.  Eligible expenses for both credits are restricted to "Maryland qualified research and development, as defined in §41(d) of the Internal Revenue Code and regulations there under (the federal R&D tax credit), conducted in Maryland.

Application dates follow the filing date for taxes. After receiving certification and credit amount, the firm may file an amended tax return for the year.

Remain in effect until January 1, 2020, subject to extension by the General Assembly.

Tax year 2011 applications must be submitted by September 15, 2012. 

Additional Resources
Tax Credit Application
Statute
Regulations
Frequently Asked Questions