Short answer. Massachusetts pays 10 percent on the increase in research spending over a base, plus 15 percent on basic research payments to universities and other qualified organizations. Unused credit carries forward 15 years, and certified life sciences companies have a refundable path worth 90 percent of the balance.
Key facts
| Rate (own research) | 10% of the increase in Massachusetts QRE |
|---|---|
| Rate (basic research payments) | 15% of payments to qualified organizations |
| Refundable | No (90% refundable path for certified life sciences) |
| Carryforward | 15 years (indefinite for the 75%-rule portion) |
| Form | Schedule RC |
Two rates: 10 and 15 percent
Which rate applies depends on whether you do the research or fund it.
The standard rate is 10 percent of the excess of Massachusetts qualified research expenses over a base amount, computed like the federal Section 41 base but limited to Massachusetts. This rate rose from 7.5 percent to 10 percent for tax years beginning on or after January 1, 2021.
A separate 15 percent rate applies to basic research payments made to qualified organizations. This is the path for a company funding research at MIT, Harvard, UMass, or another qualifying Massachusetts institution. The credit sits at M.G.L. Chapter 63, Section 38M.
The excise limitation and carryforward
How much you can use in a year is tiered, and the leftover banks for a long time.
The credit can reduce your first $25,000 of corporate excise by 100 percent, then 75 percent of the excise above $25,000. Whatever you cannot use carries forward 15 years. Credit disallowed only because of the 75 percent rule carries forward indefinitely, so a high-research company can build a large balance early and apply it over many years.
The life sciences exception
Most companies cannot get cash; certified life sciences companies can.
The standard credit is non-refundable. A company certified under the Massachusetts Life Sciences Center program is the exception: the Center can authorize a refund of unused research credits at 90 percent of the remaining balance instead of a pure carryforward. The credit is claimed on Schedule RC, and the qualified research definition tracks federal Section 41.
More on Massachusetts's R&D credit
The full state overview, the federal Section 41 work it builds on, and related state guides:
Sources
Every claim on this page traces to a primary authority. Each source below is independent and verifiable.
- Massachusetts Research Tax Credit (M.G.L. c.63 s.38M) - Massachusetts Department of Revenue
- Massachusetts 2024 Schedule RC instructions - Massachusetts Department of Revenue
- 26 U.S.C. ยง 41 (credit for increasing research activities) - Cornell Law School, Legal Information Institute
Get documentation built to survive an exam
R&D Binder produces the federal Section 41 binder and the Massachusetts state workpaper from one engagement, both built to survive an exam.