Massachusetts: 10 percent on incremental R&D, 15 years of carryforward.

Rate	10% incremental, plus 15% on basic research
Carryforward	15 years

Two components, both claimed on Schedule RC.

• 10 percent on incremental QRE. Ten percent of the excess of Massachusetts qualified research expenses over a base amount. The base amount calculation parallels federal IRC §41 with the Massachusetts in-state performance modifier.
• 15 percent on basic research payments. Fifteen percent of basic research payments made to qualified organizations. This is the path for companies funding research at MIT, Harvard, Boston University, UMass, or other qualifying Massachusetts research institutions.

The standard rate moved from 7.5 percent to 10 percent for tax years beginning on or after January 1, 2021. The 15 percent rate for basic research payments has been stable.

Statutory citation: Massachusetts General Laws Chapter 63, Section 38M (corporate excise research credit) and Section 38N (related provisions). Regulation: 830 CMR 63.38M.1 (and the proposed 830 CMR 63.38M.2 for tax years beginning on or after January 1, 2015). Form: Schedule RC, filed with the corporate excise return.

The Massachusetts research credit has a two-tier excise limitation. The credit may reduce the corporation's first $25,000 of corporate excise by 100 percent, plus 75 percent of the excise above $25,000. Excess credit beyond that limitation does not disappear; it carries forward.

Standard carryforward is 15 years. Credits disallowed solely because of the 75 percent rule carry forward indefinitely. This is favorable: a high-QRE Massachusetts SaaS company can build up substantial carryforward in early years and apply it as profitability grows.

Certified life sciences companies (under the Massachusetts Life Sciences Center program) have a special refundable path. The Center may authorize a refund of unused research credits at 90 percent of the remaining balance instead of pure carryforward. This applies only to companies certified by the Life Sciences Center; standard SaaS companies are not eligible for the refundable variant.

The standard credit is non-refundable. The QRE definition tracks federal IRC §41 with a Massachusetts conformity date that historically referenced the federal code as of August 12, 1991. For most SaaS research activity the federal and Massachusetts QRE concepts align cleanly; edge cases may turn on conformity-date specifics and warrant a CPA review.

R&D Binder produces federal Section 41 documentation from your GitHub commit history. The binder supports your federal Form 6765 and, starting tax year 2026, the mandatory Form 6765 Section G appendix. The same documentation foundation supports Massachusetts, since the Schedule RC QRE definition references the federal definition.

The Massachusetts state credit workpaper is a $995 add-on to the standard binder engagement. It produces:

• A Massachusetts-attributable QRE breakdown (employee, contractor, and supplies expenses tied to research conducted in Massachusetts, using the same business-component partition as the federal binder).
• Schedule RC input values for the 10 percent incremental computation and, where applicable, the 15 percent basic research payment computation.
• Carryforward tracking notes (15-year window plus the indefinite carryforward for 75-percent-rule disallowances) so your CPA can sequence credit utilization.
• Filing notes for your CPA: which Schedule RC lines, statutory references, the excise limitation calculation.

We do not file Schedule RC or sign the Massachusetts return. That stays with your CPA. R&D Binder produces the workpaper; your CPA files.

A worked example. A Boston SaaS company with 14 engineers, $3.2M in qualifying wages (federal QRE pool), and 10 engineers physically located in Massachusetts.

• Federal Section 41 credit. Computed on the full $3.2M federal QRE pool through Form 6765, claimed by the CPA. R&D Binder produces the binder, QRE workpaper, and Form 6765 Section G appendix.
• Massachusetts credit. Computed on the Massachusetts-attributable portion of QREs. Roughly $2.29M ($3.2M times 10/14 engineer location ratio, with actual allocation refined by per-employee work-location records). The CPA computes the 10 percent incremental credit on Schedule RC against a Massachusetts base amount. If the company funds any qualifying research at MIT, Harvard, or another qualified Massachusetts organization, those payments earn the higher 15 percent rate as a separate component.
• Total engagement cost. SaaS Standard tier ($4,995, 6 to 25 FTE) plus Massachusetts state workpaper add-on ($995). Total $5,990.

For a company with declining or flat Massachusetts QREs, the 15-year carryforward is a real asset. Credit earned now can be parked for years until corporate excise liability rises to absorb it.

The Massachusetts Department of Revenue examines research credit claims under substantially the same substantiation expectations as the IRS under federal Section 41: business-component identification, four-part-test rationale, contemporaneous evidence, QRE allocation by employee, contractor, and supplies. The DOR additionally scrutinizes the Massachusetts in-state performance documentation, since out-of-state QREs do not qualify for the state credit.

The binder R&D Binder produces is built to that standard from the federal side, and the Massachusetts workpaper carries employee location attribution into the same business-component structure.

Our standard scope ends at delivering the binder and the state workpaper. Audit-defense engagement for a DOR examination is a separate scope at $250 per hour, scoped per-incident. We do not represent before the DOR; that stays with your CPA or your Massachusetts tax controversy attorney.

• Massachusetts General Laws Chapter 63, Section 38M (corporate excise research credit).
• Massachusetts General Laws Chapter 63, Section 38N (related provisions).
• Massachusetts Regulation 830 CMR 63.38M.1 (Massachusetts Research Credit).
• Massachusetts Department of Revenue 2024 Schedule RC instructions.
• Massachusetts Department of Revenue Massachusetts Research Tax Credit overview.
• Massachusetts Life Sciences Center (administers the certified life sciences refundable credit path).
• IRS Form 6765 (federal Credit for Increasing Research Activities) - Massachusetts QRE definition references federal §41 with a historical conformity date.

This page is general informational content, not tax advice for any specific taxpayer. The Massachusetts research credit is administered by the Massachusetts Department of Revenue; the certified life sciences refundable path is administered by the Massachusetts Life Sciences Center. Form line references and rate citations reflect DOR published guidance as of May 2026. Confirm current rates, carryforward rules, and conformity date with your CPA or the DOR before filing.

• The Section 41 four-part test
• What is a qualified research expense (QRE)?
• Form 6765 and Section G
• California R&D credit
• Idaho R&D credit
• Illinois R&D credit
• Indiana R&D credit