PDF document

- 1 -

                              ETM
PETIETN SE                    E I EVO
         PLACIDAM SVB LIBERTAT

                                            Commonwealth of Massachusetts                          Department of Revenue

                                     2020 Instructions

                                     for Massachusetts

                                     Premium Excise

                                     Return for

                                     Life Insurance

                                     Companies

                                     63-20P
                                     Form 

                                     Massachusetts has an electronic filing requirement for this
                                     form. See TIR 16-9 for further information.

- 2 -

                                                                     2

                                                    Employees Working Remotely due
Major 2020 Tax Law                                  to COVID-19: Massachusetts Tax                       General Instructions
                                                    Implications                                         Extension Due Dates
Changes                                             Massachusetts declared a state of emergency and      C corporations are allowed an automatic exten-
                                                    issued several health and safety related restric-    sion to file their tax returns if they satisfy the pay-
Federal Conformity
                                                    tions in response to the 2019 novel Coronavirus      ment requirements stated in TIR 15-15. Tax
Massachusetts generally follows the Internal Rev-
                                                    (“COVID-19”) pandemic. As a result, many busi-       returns filed on extension are due 6 months from
enue Code (IRC) as currently in effect for Mass-
                                                    nesses implemented work-from-home require-           the due date (October 15 in the case of C corpo-
achusetts corporate excise tax purposes. For
                                                    ments for their employees. DOR has provided          rations filing on a calendar year basis). See TIR
more up-to-date and detailed information on tax
                                                    Massachusetts tax relief in situations in which      17-5.
changes and federal conformity please see the
                                                    employees work remotely due solely to the
dedicated 2020 Tax Changes page on our website                                                           Electronic Filing and Payment
                                                    COVID-19 pandemic to minimize disruption for
at https://www.mass.gov/orgs/massachusetts-                                                              Requirements
                                                    corporations doing business in Massachusetts.
department-of-revenue.                                                                                   Insurance companies are required to file and pay
                                                    See 830 CMR 62.5A.3: Massachusetts Source In-
Coronavirus Aid, Relief, and                        come of Non Residents Telecommuting due to           their taxes electronically. For further information,
                                                    the COVID-19 Pandemic, and TIR 20-15: Revised        see TIR 16-9.
Economic Security Act                               Guidance on the Massachusetts Tax Implications       Who Must File Form 63-20P?
On March 27, 2020, Public Law 116-136, the          of an Employee Working Remotely due to the           All domestic life insurance companies, as defined
Coronavirus Aid, Relief, and Economic Security      COVID-19 Pandemic. These rules are effective         by MGL ch 175, §§ 47 and 118, which are subject
Act (the CARES Act), was signed into law. The       until 90 days after the state of emergency in        to MGL ch 63, § 20, and which do any or all of
CARES Act provides for federal changes to a va-     Massachusetts is lifted.                             their business in Massachusetts, must complete
riety of provisions of the Internal Revenue Code
(IRC) that affect business entities subject to the  DOR will not consider the presence of one or         and file Form 63-20P.
corporate and ﬁnancial institution excise. In re-   more employees working remotely from Mass-           A domestic life insurance company is a company
sponse to the CARES Act, the Department of Rev-     achusetts solely due to a Pandemic-Related Cir-      incorporated or formed in the Commonwealth.
enue (DOR) issued TIR 20-9: Massachusetts Tax       cumstance, including the presence of business
Implications of Selected Provisions of the Federal  property reasonably needed for such persons’         All classes of foreign life insurance companies on
CARES Act, which addresses various provisions       use while working remotely, to be sufficient in      accident and health business subject to MGL ch,
that are specific to corporations and small busi-   and of itself to establish corporate nexus and a     §§ 23, 24 and 24A must file Form 63-20P.
nesses including (1) small business loan forgive-   corporate excise filing requirement. In addition,    All foreign life insurance companies subject to
ness, (2) modifications to the federal limitations  such presence will not, of itself, cause a corpora-  MGL ch 63, §§ 20, 21 and 24A must file Form
on net operating losses, (3) modifications to lim-  tion to lose the protections of Public Law 86-272.   63-20P.
itation on business interest deduction, (4) techni- Relatedly, for corporate apportionment purposes,     A foreign company is any company organized or
cal amendments regarding qualified improvement      (i) services performed by such persons in Mass-      formed in any state or country other than Mass-
property, and (5) modification of limitation on     achusetts will not increase the numerator of the     achusetts.
charitable contributions during 2020. TIR 20-9 is   employer’s payroll factor, and (ii) the presence in
available on DOR’s website.                         Massachusetts of business property reasonably        Note: An extension of time to file is not valid if
                                                    needed for such persons’ use while working re-       the corporation fails to pay at least 50% of the
Tax Cuts and Jobs Act                               motely will not increase the numerator of the em-    total tax liability or the minimum tax of $456,
The Tax Cuts and Jobs Act (TCJA) also changed       ployer’s property factor.                            which ever is greater, through estimated payments
                                                                                                         or an extension payment, by or before the due
a variety of provisions of the IRC that affect busi-
ness entities subject to the corporate and finan-   Filing Due Dates                                     date of the original return.
cial institution excise. In response to the TCJA,   Massachusetts General Laws (MGL) ch 62C, §§          Any tax not paid on or before the due date —
DOR issued written guidance addressing the im-      11 and 12 require C corporations to file their tax   without regard to the extension — shall be sub-
pact of the TCJA in Massachusetts. See e.g., TIR    returns on or before the 15th day of the fourth      ject to an interest charge.
19-17: Application of IRC § 163(j) Interest Ex-     month following the close of each taxable year
pense Limitation to Corporate Taxpayers, TIR 19-    (April 15 in the case of corporations filing on a    What Are the Penalties for Late Returns?
11: Legislation Impacting the Massachusetts Tax     calendar year basis). The filing due date for S cor- Insurance excise returns which are not filed
Treatment of Selected International Provisions of   poration tax returns is the 15th day of the third    and/or paid on or before the due date are subject
the Federal Tax Cuts and Jobs Act, TIR 19-9: Ex-    month following the close of each taxable year.      to interest and penalty charges. The penalty for
tension of Time to File Short-Year Returns Result-  See TIR 17-5.                                        failure to pay the total payment due with this form
                                                                                                         is 1% of the balance due per month (or fraction
ing from Partnership Technical Termination, TIR     For most calendar year filers, returns are due       thereof), up to a maximum of 25% of the tax re-
19-7: Massachusetts Treatment of Investments in     April 15, 2021.                                      ported as due on the return. A late payment
Qualified Opportunity Zones, and TIR 19-6: Im-
                                                                                                         penalty does not apply to amended returns when
pact of the Federal Tax Cuts and Jobs Act on a
                                                                                                         the amount shown on the original return was
Taxpayer’s Overall Method of Accounting for
                                                                                                         paid.
Massachusetts Purposes. All of these TIRs are
available on DOR’s website.

- 3 -

The penalty for failure to file a return by the due      stallment payment that results from using this
date is 1% of the balance due per month (or frac-        method must be added to the second installment
tion thereof), up to a maximum of 25%.                   payment.
Any tax not paid on or before the due date —             A company that claims the exception to the un-
without regard to the extension — is subject to          derpayment penalty of equaling the prior year’s
interest.                                                tax liability must provide federal tax returns (front
                                                         page only) for the three preceding taxable years
What is a Valid Return?                                  to verify that federal taxable income is less than
A valid return is one upon which all required            $1 million.
amounts have been entered for all of the appro-
priate items on the form. Data sheets, account           Note: Any insurance company required to file
forms, or other documents may be attached to             more than one type of excise return must also file
explain these amounts. Referencing items to at-          separate estimated tax payments since each type
tachments instead of properly entering all               of tax is governed by a different section of the
amounts onto the return is not sufficient. The re-       Massachusetts General Laws.
turn must be signed by either the treasurer or the       For more information on corporate estimated
assistant treasurer of the company.                      taxes, refer to MGL ch 63B.
To be valid, a return must also include the follow-      How Is the Excise Determined?
ing:                                                     Domestic life insurance companies are taxed both
•   Schedule T, Exhibit of Premiums Written from         on life and accident and health premiums written
the NAIC Annual  Statement;                              in Massachusetts and on premiums written in
•   Annual Statement for the Year for Direct Busi-       other jurisdictions where no tax is paid. Form 63-
ness in the State of  Massachusetts.                     20P filers must also add in dividends applied to
                                                         purchase paid-up additions and/or to shorten the
Reproduction of returns must be approved by              premium paying period. The tax rate is 2% after
DOR prior to filing and meet the criteria provided       claiming allowable deductions.
in TIR 95-8.
                                                         Form 63-20P filers are allowed deductions for
Failure to meet any of the requirements detailed         dividends to policyhold ers, including those:
in this section may result in a penalty for filing an
insufficient return. Such a penalty may be as-
sessed at double the amount of the excise due.
When are Estimated Tax Payments
Required?
Any insurance company which reasonably esti-
mates its excise to be in excess of $1,000 for the
taxable year is required to make estimated tax
payments to the Commonwealth. Estimated pay-
ments must be made in quarterly installments of
40%, 25%, 25% and 10% of the estimated an-
nual tax liability.
Note: New corporations in their first full taxable
year with less than 10 employees have different
estimated payment percentages — 30%, 25%,
25% and 20% respectively.
Insurance companies that underpay, or fail to pay,
their estimated taxes may incur an additional
penalty on the amount of the underpayment for
the period of the underpayment. Form M-2220,
Underpayment of Massachusetts Estimated Tax
by Corporations, is used to compute the addi-
tional charge.
Any corporation having $1 million or more of fed-
eral taxable income in any of its three preceding
taxable years (as defined in Internal Revenue
Code (IRC) § 6655(g)) may only use its prior
year’s tax liability to calculate its first quarterly es-
timated tax payment. Any reduction in the first in-

- 4 -

Are There Special Tax Credits Available In pany’s total capital contribution in excess of their Note: The due dates for estimated tax payments
Massachusetts? full proportionate share which shall mean an in - are not the same as the return due dates for cor-
Yes. Massachusetts offers several special credits vestment in the Massachusetts Life Insurance porations. An overpayment from the prior year re-
to corporations. See instructions for Credit Man- Company Commu nity Investment Initiative. turn applied to the following year’s estimated tax
ager Schedule (Schedule CMS) beginning on This credit is effective for tax years in which the will be credited on the 15th day of the fourth
page 4. aggregate cumulative investment in the Mass- month; one month after the due date for the first
achusetts Life Insurance Company Community installment.
Line Instructions Investment Initiative reaches $100,000,000 or the An overpayment of tax cannot be applied as a
Should the Whole Dollar Method be Used? tax year 2005, which ever is later. credit to the tax of another account of this com-
Yes. All amounts entered on Form 63-20P must pany or to the tax of another company.
be rounded off to the nearest dollar. Line 16
Enter 1.5% (0.015) of the company’s proportion- Line 33
Line 1 ate share of the cost of certain investments in the If line 29 is greater than line 22, enter the balance
Enter the amount of premiums subject to tax in Massachusetts Capital Resource Company. due in line 33.
Massachusetts (from Part 1, Domestic Life Pre-
mium Excise Calculation, line 10). If amount is Line 17 Lines 34a through 35
negative, enter 0. The taxpayer may take 10% of any class B as- Any company that has an underpayment of esti-
sessments paid to the Massachusetts Life and mated tax will incur a penalty on the underpay-
Line 4 Health Insurance Guaranty in the prior five calen- ment for the period of the underpayment. Enclose
Enter the amount of accident and health premi- dar years. For this 2020 return, the taxpayer may a copy of Form M-2220. For more information,
ums subject to tax in Massachusetts from Part 1, take 10% of class B assessments paid in 2015 refer to the section When Are Estimated Tax Pay-
Domestic Life Premium Excise Calculation, line through 2019. ments Required?
11.
Line 18 Any company that fails to file a timely return will
Lines 5 and 13 Enter the total amount of other credits claimed be subject to a late filing penalty of 1% per month
If the corporation is required to recapture any from the Schedule CMS. Do not include refund- (or fraction thereof), and a late payment penalty
amount of previously claimed Economic Oppor- able credits that you will be reporting below on of 1% per month (or fraction thereof), on the
tunity Area Credit, Low-Income Housing Credit, line 28 in the total reported on this line. amount required to be shown as the tax due on
Life Science Credit and Historic Rehabilitation the return. For more information, refer to the sec-
Credit, complete the Credit Recapture Schedule Line 21 tion What Are the Penalties for Late Returns?
(Schedule CRS) and enter the result in line 5 or Any corporation that wishes to contribute any
Any company which fails to pay its tax when due
13 of the return. Current year credits can then be amount to the Natural Heritage and Endangered
will be subject to interest on the unpaid balance.
used to offset the total excise due which will in- Species Fund may do so on this form. This
clude the recapture amount. amount is added to the excise due. It increases Line 36
the amount of the cor poration’s payment or re- Enter the total payment due. Insurance compa-
Line 7 duces the amount of its refund. nies are required to submit any payment due
Enter the amount of life premiums subject to tax electronically. See TIR 16-9.
The Natural Heritage and Endangered Species
in Massachusetts from Part 2, Foreign Premium
Fund is administered by the Department of Fish-
Excise Calculation, line 7. If amount is negative, Signature
eries, Wildlife and Environmental Law Enforce-
enter 0. When the form is complete, it must be signed by
ment to provide for conservation programs for the treasurer or assistant treasurer. If you are
Lines 8 and 11 rare, endangered and nongame wildlife and plants signing as an authorized delegate of the appro-
Use Part 3 of Form 63-20P to calculate your ex- in the Commonwealth. priate corporate officer, check the box in the sig-
cise using the same method and rate used by the nature section and attach a Massachusetts Form
Line 27
state in which you are incorporated and would be M-2848, Power of Attorney.
Enter the amount of any withholding tax from
imposed on a like Massachusetts insurance com-
pass-through entities. Be sure to include the tax -
pany, or its agents, if doing business to the same Schedule CMS: Tax Credits
payer identification number of the person or en-
extent. If the computation in the state of your in- Financial institutions, insurance companies, busi-
tity submitting the withholding payment on behalf
corporation is in every respect the same as your ness corporations, and other taxpayers subject to
of the taxpayer.
Mass achusetts computation, a statement to that tax under MGL ch 63 may be eligible for certain
effect should be made. Retaliatory tax provisions Lines 30 through 32 tax credits in Massachusetts. Credits may be
are provided under MGL ch 63, § 24A. If line 29 is greater than line 22, subtract line 22 used to offset a tax due, may be passed or shared
from line 29 and, enter the amount overpaid in
Line 10 with another person or entity, or, in some cases
line 30.
Enter the amount of total net direct accident and credits may be fully or partially refundable. MGL
health pre mi ums subject to tax in Massachusetts The overpayment may be applied in part or in full ch 63 taxpayers with credits available for use in
from Part 2, Foreign Premium Excise Calculation, to 2021 estimated taxes by entering in line 31 the the current taxable year must file a Schedule CMS
line 12. If the amount is negative, enter 0. amount to be credited to 2021 estimated tax pay- to claim most credits.
ments. Enter in line 32 the amount to be re- For each credit claimed on a Schedule CMS, re-
Line 15 funded. port the amount of the credit available for use and
A company shall be allowed a credit against the the amount of credit claimed to reduce tax for the
premium tax equal to 1.5% (0.015) of such com-

- 5 -

                                                                            5

current taxable year. For pass-through entities, re-  Credit. However, a taxpayer that received a credit    be either 90% or 100% of the reduction. See TIR
port  the  amount  of  credit  distributed  to        on a Massachusetts K-1 schedule from a pass-          13-6, Example 3, for an illustration.
partners/shareholders/beneficiaries in the credit     through entity or a credit transfer should report     Note: Do not report the refundable Film Incentive
shared column. Taxpayers also report the amount       such credit in Section 3 or 4, as applicable.         Credit in this section because these credits are is-
of a refundable credit they are using to request a                                                          sued new certificate numbers from the DOR
refund of tax. See the 2020 Credit Manager            Section 2. Refundable Credits
Schedule Instructions for more information on         Section 2 is for reporting refundable credits the     when they are received from a pass-through en-
how to complete the Schedule CMS and claim the        taxpayer is using to request a refund. The Film In-   tity or a credit transfer. If the taxpayer is request-
credits.                                              centive Credit should always be included in Sec-      ing a refund of the Film Incentive Credit, it should
                                                      tion 2 to the extent that the taxpayer is requesting  be reported in Section 2.
Credits reported on the Schedule CMS are gener-       a refund. However, a taxpayer that received a re-     List of Credit Names and Credit Codes
ally identified either by a certificate number as-    fundable credit on a Massachusetts K-1 from a         The following table identifies various credits that
signed by the issuing agency (which may be the        pass-through entity or a credit transfer should re-   may be available to a taxpayer subject to tax
DOR) or by the tax period end date in which the       port such credit in Section 4, to the extent that     under MGL ch 63 and that must be claimed on a
credit originated. If a credit has been assigned a    the taxpayer is requesting a refund. For each re-     Schedule CMS.
certificate number, the certificate number must be    fundable credit, report the amount of the credit
included on the Schedule CMS. A taxpayer that         available after taking into consideration any         Apprenticeship Tax Credit………..APPCRD*
does not include an assigned certificate number       amount of the credits that may have been taken        Brownfields . . . . . . . . . . . . . . . . . . BRWFLD
on the Schedule CMS will not be allowed the           to offset a tax or shared as reported in Section 1
                                                                                                            Certified Housing . . . . . . . . . . . . . . CRTHOU
credit on the tax return and will have their tax lia- of this schedule. Enter the amount by which the
bility adjusted by the DOR. Be sure to omit hy-       available credit balance is being reduced and the     Community Investment . . . . . . . . . CMMINV*
phens, spaces, decimals and other special             amount to be treated as a refundable credit,          Conservation Land . . . . . . . . . . . . . CNSLND*
symbols when entering the certificate number.         which may be either 90% or 100% of the reduc-
Also, enter the number from left to right.            tion. See TIR 13-6, Example 3, for an illustration.   Dairy Farm . . . . . . . . . . . . . . . . . . . DAIFRM*
Likewise, a taxpayer that is required to complete                                                           EDIP . . . . . . . . . . . . . . . . . . . . . . . . EDIPCR*
                                                      Section 3. Non-Refundable Credits
a separate schedule to claim a credit must include                                                          EDIP-Vacant Storefront Credit…....VACSTR*
                                                      Received from Massachusetts K-1
the separate schedule with the taxpayer’s return
filing. Failure to do so may result in the credit     Schedules                                             Employer Wellness. . . . . . . . . . . . . EMPWLL
being disallowed.                                     Section 3 is for reporting credits the taxpayer re-   EOAC . . . . . . . . . . . . . . . . . . . . . . . EOACCR
                                                      ceived on a Massachusetts K-1 schedule (SK-1,
If, by operation of MGL ch 63, § 32C or another       2K-1 or 3K-1) that the taxpayer is using  (i) to off- Film Incentive . . . . . . . . . . . . . . . . . FLMCRD*
provision of law, a credit normally identified by     set or reduce the taxpayer’s total tax due (ii) to    Harbor Maintenance. . . . . . . . . . . . HRBMNT
tax period end date is eligible for indefinite carry- pass to any partner, shareholder or beneficiary of    Historic Rehabilitation . . . . . . . . . . HISRHB
over, the credit should be reported as “non-expir-    the taxpayer or (iii) to share with taxpayer affili-
ing” and identification of the tax period of origin   ates. The Brownfields Credit, Film Incentive          Investment Tax . . . . . . . . . . . . . . . . INVTAX
is not necessary.                                     Credit, or Medical Device Credit should never be      Life Science (FDA) . . . . . . . . . . . . . LFSFDA*
Overview of Schedule CMS                              included in Section 3.
                                                                                                            Life Science (ITC). . . . . . . . . . . . . . LFSITC*
The following is a brief overview of the Schedule     Note: Do not report the Brownfields Credit, Film
                                                                                                            Life Science (Jobs). . . . . . . . . . . . . LFSJOB*
CMS sections and where certain credits should         Incentive Credit, and Medical Device Credit in this
be reported. If a taxpayer is using a credit to re-   section because these credits are issued new cer-     Life Science (RD) . . . . . . . . . . . . . . LFSRDC
duce a taxpayer’s current year tax liability,         tificate numbers from the DOR when they are re-       Low-Income Housing. . . . . . . . . . . LOWINC
whether it is a non-refundable credit or a refund-    ceived from a pass-through entity or a credit
able credit, the credit should be reported in Sec-    transfer. These credits should always be reported     Low-Income Housing Donation . . . LIHDON
tion  1  or  3  of  the  Schedule  CMS.  Only  a      in Section 1, unless the taxpayer is requesting a     Medical Device . . . . . . . . . . . . . . . . MEDDVC
refundable credit that the taxpayer is seeking a re-  refund of the Film Incentive Credit.                  Research. . . . . . . . . . . . . . . . . . . . . REARCH*
fund for should be reported in either Section 2 or
4 of the Schedule CMS. Generally, a credit should     Section 4. Refundable Credits Received                Vanpool . . . . . . . . . . . . . . . . . . . . . VANPOL
only be reported in one section on the Schedule       from Massachusetts K-1 Schedules                      Veteran’s Hire . . . . . . . . . . . . . . . . . VETHIR
CMS unless a portion of it is being used to offset    Section 4 is for reporting credits the taxpayer re-
a tax and a portion is being refunded.                ceived on a Massachusetts K-1 schedule (SK-1,         *These credits may be partially or fully refund-
                                                      2K-1 or 3K-1) and that the taxpayer is using to       able. See Schedule CMS instructions for further
Section 1. Non-Refundable Credits                     request a refund. The Film Incentive Credit should    information.
Section 1 is for reporting credits the taxpayer is    never be included in Section 4. For each refund-      Note: Certified life sciences companies with a Re-
using (i) to offset or reduce the taxpayer’s total    able credit, report the amount of the credit avail-   search Credit exceeding the amount of credit that
tax due (ii) to pass to any partner, shareholder or   able after taking into consideration any amount of    may be claimed under section 38M for a taxable
beneficiary of the taxpayer or (iii) to share with    the credits that may have been used to offset a       year may, to the extent authorized under the Life
taxpayer affiliates. The Brownfields Credit, Film     tax or shared as reported in Section 3 of this        Sciences Tax Incentive Program, elect to make
Incentive Credit, or Medical Device Credit should     schedule. Enter the amount by which the available     90% of the balance of remaining credits refund-
always be included in Section 1, unless the tax-      credit balance is being reduced and the amount        able. See MGL ch 63, § 38M(j).
payer is requesting a refund of the Film Incentive    to be treated as a refundable credit, which may

- 6 -

Credit Recapture Schedule business corporation claiming the credit in a tax- Housing Development Credit (CHDC) in an
The Credit Recapture Schedule (CRS), which able year may also be eligible for a credit in the amount up to 25% of the costs of qualified pro-
eliminates Schedule RF, lists each credit for which subsequent taxable year, provided that the Divi- ject expenditures as defined in MGL ch 40V, § 1.
a recapture calculation must be made. sion of Apprentice Standards again certifies that Eligibility for and the amount of CHDC awarded
the apprentice remains employed as an appren- are determined and administered by the Depart-
Certain Massachusetts tax credits are subject to tice during the subsequent taxable year. ment of Housing and Community Development
recapture as specified in the statute authorizing (DHCD). The CHDC is not refundable, but unused
the credit (e.g. the investment tax credit is subject The ATC is not transferrable but is refundable.
to recapture under MGL ch 63, § 31A(e) if an asset The ATC is available for tax years beginning on or amounts may be transferred or carried forward
for which the credit was taken is disposed of be- after January 1, 2019. See TIR 18-13 for further for 10 years. See TIRs 16-15, 10-15, and 10-14
fore the end of its useful life). Recapture may also information. for further information.
be triggered if the corporation no longer qualifies To claim the ATC, enter the ATC certificate num- To claim the CHDC, enter the CHDC certificate
for the credit (as when a manufacturing corpora- ber and the amount of ATC using credit code AP- number and the amount of CHDC using credit
tion ceases to qualify as such or a corporation’s PCRD on Schedule CMS. code CRTHOU on Schedule CMS.
status as a Life Sciences Company is terminated Community Investment Tax Credit
as discussed in TIR 13-6.) Brownfields Tax Credit
Taxpayers subject to tax under MGL ch 63 and Taxpayers subject to tax under MGL ch 63 may
If a recapture calculation is required, the amount nonprofit organizations may be eligible to claim a be able to claim a Community Investment Tax
of the credit allowed is redetermined and the re- Brownfields Tax Credit (BTC) for amounts ex- Credit (CITC) for cash contributions made to a
duction in the amount of credit allowable is re- pended to clean up contaminated property in community partner to support implementation of
captured to the extent the credit was taken or Massachusetts in an amount equal to either 25% its community investment plan, or to a commu-
used in a prior year. See DD 89-7. Taxpayers who or 50% of the cost. The cleanup must begin on nity partnership fund. The CITC is equal to 50%
have a recapture calculation must complete this or before August 5, 2023, and costs must be in- of the total contribution made by the taxpayer and
schedule whether or not a recapture tax is deter- curred before January 1, 2024, and equal or ex- cannot be claimed for contributions of less than
mined to be due. ceed 15% of the assessed value of the property $1,000. The Department of Housing and Commu-
For credits tracked by certificate numbers, enter before the beginning of the cleanup. Contami- nity Development (DHCD) is responsible for de-
each certificate number and the associated cred- nated properties must be owned or leased for termining which contributions qualify for the CITC
its separately. For credits not tracked by certificate business purposes, reported to the Massachu- and the actual amount of the CITC awarded. The
number, enter credits separately by type and the setts Department of Environmental Protection CITC is not transferrable. However, the CITC is re-
year to which they relate. List only those credits (DEP), cleaned up in compliance with DEP’s stan- fundable, or, alternatively, may be carried forward
and certificate numbers or tax years for which a dards, and located in an economically distressed for 5 years. For further information, see 760 CMR
reduction in the credit is being calculated. area identified by DEP. Unused portions of BTC 68.00, 830 CMR 62.6M.1, and TIRs 16-15, 13-
For more information and examples, see the may be carried forward for the next 5 years. If a 15, and 12-10.
Credit Recapture Schedule instructions. BTC recipient does not maintain the property in To claim the CITC, enter the CITC certificate num-
compliance with standards set out by DEP, the ber and the amount of CITC using credit code
Brief Summary of Available Credits on credit may be recaptured. The BTC is not refund- CMMINV on Schedule CMS.
Schedule CMS able. For taxpayers subject to a minimum excise
The following are brief summaries describing the under MGL ch 63, the BTC cannot reduce the ex- Conservation Land Tax Credit
specific credits that may be available to a taxpayer cise due below the minimum amount. The BTC is Taxpayers subject to tax under MGL ch 63 that
subject to tax under MGL ch 63 and that must be also subject to the 50% limitation for taxpayers make qualified donations of certified land to a
claimed on a Schedule CMS. subject to tax under MGL ch 63, § 39. public or private conservation agency in Mass-
achusetts may be eligible for a Conservation Land
Apprenticeship Tax Credit The BTC may be transferred, sold or assigned to Tax Credit (CLTC). The Executive Office of Energy
Businesses corporations subject to tax under another taxpayer with a liability under MGL ch 62 and Environmental Affairs (EEA) ultimately deter-
MGL ch 63 that employ qualified apprentices may or 63, or to a nonprofit organization. A taxpayer mines which donations qualify for CLTC and the
be eligible for an Apprenticeship Tax Credit (ATC). must complete a Form BCA, Brownfields Credit actual amount of CLTC attributable to the dona-
The credit is equal to the lesser of $4,800 or 50% Application, and submit it to DOR. If approved, tion. The CLTC is equal to 50% of the fair market
of the wages paid by the business to each quali- DOR will issue a certificate reflecting the amount value of the donated certified land but may not
fied apprentice it hires. Business corporations are of the BTC awarded. The party receiving the BTC exceed $75,000. The CLTC is refundable but is
eligible for up to $100,000 in credits each calen- must include the certificate number with each tax not transferable. Taxpayers who claim CLTC may
dar year. To claim the credit, the primary place of return in which the credits are being applied. BTC not claim any other credit or deduction in the
employment of the apprentice must be in Mass- application forms, including Form BCA, and addi- same tax year for the costs related to the same
achusetts, the business corporation employing tional information are available at mass.gov/dor. donated, certified land. For further information,
the apprentice must register with the Division of To claim the BTC, enter the BTC certificate num- see 301 CMR 14.00, and 830 CMR 62.6.4.
Apprentice Standards as an apprenticeship pro- ber and the amount of BTC using credit code BR- To claim the CLTC, enter the CLTC certificate
gram sponsor and enter into apprenticeship WFLD on Schedule CMS. number and the amount of CLTC using credit
agreements with each apprentice for whom the code CNSLND on Schedule CMS.
credit is claimed, and the apprentice must be em- Certified Housing Development Tax Credit
ployed for at least 180 calendar days in the tax- Taxpayers subject to tax under MGL ch 63 that
able year in which the credit is claimed. A invest in housing development projects in Mass-
achusetts may be eligible to claim the Certified

- 7 -

Dairy Farm Tax Credit Economic Development Incentive Program tax under MGL ch 63 is determined by the EACC
Massachusetts dairy farmers taxable under MGL Credit for Projects Certified on or After based on numerous factors set forth in MGL ch
ch 63 may be eligible for a Dairy Farm Tax Credit January 1, 2010 and Before January 1, 23A § 3D. The EACC may award a refundable
(DFTC) based on the amount of milk produced 2017 EDIPC to any certified project. Unless the EDIPC
and sold during the taxable year when the cost of For projects certified by the EACC on or after Jan- awarded is refundable, the EDIPC may not offset
milk drops below a price based on federal stan- uary 1, 2010 and before January 1, 2017, the more than 50% of the excise due. Carryover of
dards. The dairy farmer must have a certificate of Economic Development Incentive Program Credit unused EDIPC is available only to the extent
registration as a Massachusetts dairy farm from (EDIPC) is available to taxpayers subject to tax authorized by the EACC. Recapture is required
the Massachusetts Department of Agricultural under MGL ch 63 with respect to certified pro- only if the EACC revokes the certification of a pro-
Resources (MDAR). The total amount of DFTC jects as defined under MGL ch 23A. The EDIPC is ject. The EDIPC is not transferable. For taxpayers
granted through the program cannot exceed equal to a percentage of the cost of qualifying subject to a minimum excise under MGL ch 63,
$6,000,000 in any year. The DFTC is refundable property purchased by a certified project for busi- the EDIPC may not reduce the excise due below
but is not transferrable. ness use within Massachusetts. As part of the the minimum amount. See TIRs 16-15 and 10-01
To claim the DFTC, enter the MDAR-issued cer- project certification, the EACC may (but is not re- for further information.
tificate number and the amount of DFTC from the quired to) award a credit under the program and To claim the EDIPC, complete Schedule EDIP and
MDAR’s Dairy Farmer Certified Tax Credit State- determine the percentage of the cost of the prop- enter the amount of EDIPC using credit code
ment using credit code DAIFRM on Schedule erty to be used to determine the credit. In addi- EDIPCR on Schedule CMS. Also, enter the EACC-
CMS. tion, the EACC may award an EDIPC that is issued certificate number on Schedule CMS. In-
refundable. To qualify for the EDIPC, the qualify- clude both the completed Schedule EDIP and
Economic Opportunity Area/Economic ing property must be used exclusively in the cer- Schedule CMS with the return.
Development Incentive Program Credits tified project in Massachusetts and must meet the
Economic Opportunity Area Credit same tests imposed for the 3% ITC. EDIP Credit for Vacant Storefronts
Effective January 1, 2019, awards of EDIPC are
Taxpayers subject to tax under MGL ch 63 that Unless the EDIPC awarded is refundable, the also available as a Vacant Storefront Credit (VSC)
participated in projects certified by the Economic credit may not offset more than 50% of the tax to taxpayers subject to tax under MGL ch 63 that
Assistance Coordinating Council (EACC) before due. Carryover of unused EDIPC is available only occupy vacant storefronts in downtown areas
January 1, 2010 and in effect through December to the extent authorized by the EACC. The EACC that have been designated as Certified Vacant
31, 2016, may be eligible to claim an Economic may, in consultation with DOR, limit (but not ex- Storefront Districts. To claim the VSC a taxpayer
Opportunity Area Credit (EOAC) equal to 5% of pand) the EDIPC to a specific dollar amount or must apply for and obtain certification from the
the cost of qualifying property purchased for time duration or in any other manner deemed ap- EACC and must commit to occupy the vacant
business use within a certified project within an propriate by the EACC. St. 2009, c. 166, § 18. For storefront for not less than 1 year. The taxpayer
Economic Opportunity Area (EOA). A certified example, the EACC may limit the EDIPC available does not need to invest in improvements or cre-
project is a project approved by the EACC. To with respect to a particular project to a specific ate new jobs to claim the VSC. The EACC awards
qualify for the EOAC, the property must be used dollar maximum, even if the actual dollar amount the VSC on a competitive basis, taking into ac-
exclusively by the certified project in an EOA and of the qualifying purchases would otherwise gen- count the factors set forth in MGL ch 23A, § 3C.
must meet the same tests imposed for the 3% erate a higher credit amount. Similarly, the EACC The amount of VSC available to taxpayers occu-
Investment Tax Credit (ITC) (see ITC summary may limit the otherwise applicable credit carry pying vacant storefronts is limited to $500,000 in
below). The EOAC cannot offset more than 50% forward period provided by MGL ch 63, § 38N(d). a calendar year.
of the tax due. Any unused EOAC may be carried The EDIPC may be subject to recapture if a tax-
forward for 10 years, while credits not used be- payer’s business is decertified by the EACC, or a The VSC is not transferrable but is refundable. For
cause of the 50% limitation may be carried over taxpayer stops using the qualifying property in a additional information about the credit, contact
indefinitely. The EOAC may be subject to recap- certified project before the end of the property’s the Massachusetts Office of Business Develop-
ture if a taxpayer’s business is decertified by the useful life. The EDIPC is not transferable. For tax- ment at 617-973-8600.
EACC, or a taxpayer stops using the qualifying payers subject to a minimum excise under MGL To claim the VSC, enter the amount of the VSC
property in a certified project before the end of ch 63, the EDIPC may not reduce the excise due using credit code VACSTR on Schedule CMS.
the property’s useful life. The EOAC is neither re- below the minimum amount. See TIRs 16-15, 14- Also, enter the EACC-issued certificate number on
fundable nor transferrable. For taxpayers subject 13, 10-15, and 10-1 for further information. Schedule CMS.
to a minimum excise under MGL ch 63, the EOAC To claim the EDIPC, complete Schedule EDIP and Employer Wellness Credit
may not reduce the excise due below the mini- enter the amount of EDIPC using credit code The Employer Wellness Credit (EWC) program
mum amount. The EOAC is not available to certi- EDIPCR on Schedule CMS. Also, enter the EACC- expired on December 31, 2017 and no new EWC
fied projects that were certified by the EACC on issued certificate number on Schedule CMS. In- amounts are being awarded. However, remaining
or after January 1, 2010. See TIRs 16-15 and 10- clude both the completed Schedule EDIP and credits awarded for the 2015 through 2017 tax
01 for further information. Schedule CMS with the return. years and carried over by a taxpayer may be ap-
To claim the EOAC, complete Schedule EOAC and plied in the 2020 tax year.
EDIP Credit for Projects Certified on or
enter the amount of EOAC using credit code
EOACCR on the Schedule CMS. Include both the after January 1, 2017 Effective for tax years beginning on or after Janu-
completed Schedule EOAC and Schedule CMS The EDIPC provisions were significantly changed ary 1, 2013, a taxpayer subject to tax under MGL
with the return. for projects certified on or after January 1, 2017. ch 63 that employed 200 or fewer workers was
For projects certified by the EACC on or after Jan- eligible for the EWC for up to 25% of its costs as-
uary 1, 2017, the EDIPC for taxpayers subject to sociated with implementing a “certified wellness

- 8 -

program” for its employees. Prior to the EWC Harbor Maintenance Tax Credit Form and Allotment Schedule HRC: Historic Re-
program’s expiration on December 31, 2017, a Business corporations subject to tax under MGL habilitation Credit Summary Form.
taxpayer could claim the EWC by applying to the ch 63 that have paid certain federal harbor main-
Investment Credit
Department of Public Health (DPH) to certify its tenance taxes under IRC § 4461 may be eligible
Taxpayers subject to tax under MGL ch 63, § 39
wellness program. The amount of the credit avail- to claim the Harbor Maintenance Tax Credit
may be eligible to claim the Investment Tax Credit
able to be claimed could not exceed $10,000 in (HMTC). A corporation is eligible for the HMTC
(ITC). To claim the ITC, a corporation must qualify
any tax year and the credit was not refundable. A only for federal harbor maintenance taxes paid
as a manufacturing or research development cor-
taxpayer may carry forward any unused portion that are attributable to the shipment of break-bulk
poration under MGL ch 63, § 42B, or be princi-
of the EWC for up to 5 taxable years. For tax- or containerized cargo by sea and ocean-going
pally engaged in agriculture or commercial
payers subject to a minimum excise under MGL vessels through a Massachusetts harbor facility.
fishing. Such corporations may earn a credit
ch 63, the EWC may not reduce the excise due The HMTC is neither refundable nor transferrable.
equal to 3% of the cost of “qualifying tangible
below the minimum amount. The HMTC may not reduce the corporate excise
property” acquired, constructed, reconstructed,
Since the EWC program expired on December 31, due below the minimum amount but is not sub-
or erected during the taxable year. “Qualifying
2017, a taxpayer may only claim a previously ject to the 50% limitation imposed by MGL ch 63,
tangible property” includes tangible property,
awarded EWC that was carried over to subse- § 32C. Any unused portion of the HMTC may be
buildings, and structural components acquired by
quent tax years. Information about the criteria carried forward for the next 5 tax years. See TIR
purchase (as defined in IRC § 179(d)) that is used
DPH utilized for authorizing and certifying the 97-4 and Schedule HM instructions for further in-
and located in Massachusetts on the last day of
EWC may be found in DPH’s “Massachusetts formation.
the taxable year, and is depreciable under IRC §
Wellness Tax Credit Incentive” regulation, 105 To claim the HMTC, complete Schedule HM and 167 with a useful life of four years or more. Any
CMR 216.000. enter the amount of HMTC using credit code unused portion of the credit may be carried for-
To claim the EWC, enter the amount of EWC HRBMNT on Schedule CMS. Include both the ward for 3 tax years after the credit was earned,
using credit code EMPWLL on Schedule CMS. completed Schedule HM and Schedule CMS with while credits not used because of the 50% limita-
Also, enter the DPH issued certificate number on the return. tion may be carried over indefinitely. The ITC may
Schedule CMS. Historical Rehabilitation Credit be recaptured if the eligible property for which the
Film Incentive Credit Taxpayers subject to tax under MGL ch 63 that ITC is claimed is disposed of or ceases to be in
Motion picture production companies subject to have made qualified expenditures in the rehabili- qualified use prior to the end of its useful life (as
tax under MGL ch 63 may be eligible to claim the tation of a qualified historic structure may be eli- determined by the property’s depreciation period
Film Incentive Credit (FIC) for certain payroll and gible to claim a Historic Rehabilitation Tax Credit for federal tax purposes). The ITC is neither re-
production expenses. Production companies that (HRTC). The HRTC may be claimed for up to 20% fundable nor transferrable. The ITC may not re-
incur at least $50,000 of production costs in of the taxpayer’s rehabilitation expenditures made duce the corporate excise due below the
Massachusetts are eligible for a credit equal to in substantially rehabilitating a historic structure minimum amount, nor may the amount of the
25% of the total Massachusetts payroll for the that has received final certification from the credit exceed 50% of the taxpayer’s liability.
production, excluding salaries of $1 million and Massachusetts Historical Commission and placed To claim the ITC, complete Schedule H and enter
higher. In addition, production companies whose into service (where occupancy of the entire struc- the amount of ITC using credit code INVTAX on
Massachusetts production expenses exceed 50% ture or some identifiable portion of it is permit- Schedule CMS. Include both the completed
of the total production cost may receive a credit ted). Unused portions of HRTC may be carried Schedule H and Schedule CMS with the return.
equal to 25% of the total Massachusetts produc- forward for the following 5 tax years. The HRTC
Life Sciences Refundable FDA User Fees
tion expense. The FIC may be applied to reduce a may be transferred or sold to another taxpayer
taxpayer's liability (including the minimum ex- but is not refundable. HRTC awards also may be Tax Credit
cise), reduced by any other available credits, after transferred to other qualifying taxpayers that ac- Certified life sciences companies subject to tax
which 90% of any remaining credits may be re- quire a historic structure, as long as certain crite- under MGL ch 63, to the extent authorized by the
funded to the taxpayer. Subject to certain condi- ria are met. Any HRTC claimed by the taxpayer Life Sciences Tax Incentive Program, may be eli-
tions, unused FIC may be carried over, refunded, may be subject to recapture if the taxpayer dis- gible to claim a Life Sciences Refundable FDA
or transferred by the taxpayer for the following 5 poses of its interest in the structure within 5 years User Fees Tax Credit. The credit is equal to 100%
tax years. FIC transferees may carry forward un- of its placement into service. HRTC awards how- of the user fees paid on or after June 16, 2008, to
used FIC for the 5 tax years subsequent to the ever are not subject to recapture. For taxpayers the US Food and Drug Administration (FDA) upon
first tax year the FIC was allowed to the initial FIC subject to the corporate excise, the HRTC is not submission of an application to manufacture a
transferor. The FIC is not refundable to the trans- subject to the 50% limitation under MGL ch 63, § human drug in Massachusetts. The credit may be
feree. See TIR 07-15 for further information. 32C but may not reduce the excise below the claimed in the tax year in which the application
minimum amount. For further information, see for licensure of an establishment to manufacture
To claim the FIC, enter the FIC certificate number 830 CMR 63.38R.1 and TIRs 16-15 and 10-11. the drug is approved by the FDA. To be eligible
and the amount of FIC using credit code FLMCRD for the credit, more than 50% of the research and
on Schedule CMS. Supporting documentation To claim the HRTC, enter the HRTC certificate development costs for the drug must have been
must be available to DOR upon request. Certifi- number and the amount of HRTC using credit incurred in Massachusetts. Certified life sciences
cate application forms and additional information code HISRHB on Schedule CMS. Supporting doc- companies may use the FDA user fees credit to
are available at mass.gov/dor. umentation must be enclosed with the return or reduce their tax to zero. At the option of the tax-
the HRTC may be disallowed. For further infor- payer and to the extent authorized pursuant to the
mation on documentation see the Transfer/Sale Life Sciences Tax Incentive Program, where the
HRC: Historic Rehabilitation Credit Certificate credit exceeds the tax due, 90% of the balance of

- 9 -

the excess credit is refundable. A life sciences the extent authorized by the Life Sciences Tax In- meet the requirements established by Massachu-
company claiming the credit may not also deduct centive Program, be refundable. Excess LSRJTC setts and federal laws, and be owned by a tax-
FDA user fees for which the credit is claimed on amounts cannot be carried forward to subse- payer who enters into a regulatory agreement
its return. In the event a company’s certification quent taxable years. The LSRJTC is not trans- with DHCD.
as a life sciences company is revoked, the recap- ferrable. The LSRJTC is subject to all of the Any unused LIHTC may be carried forward for the
ture of credit may be required. The credit is not requirements of the Life Sciences Tax Incentive next 5 tax years. Alternatively, unused credits may
transferrable. For further information, see TIRs Program under MGL ch 23I. In the event of the be transferred. If an event or circumstance occurs
13-6 and 08-23. revocation of a company’s certification as a life that results, or would have resulted, in the recap-
To claim the credit, complete a Schedule RLSC sciences company or other disqualifying events, ture of any portion of a federal Low Income Hous-
and enter the amount of the credit using credit the LSRJTC may be subject to recapture. For ing Credit, then the Massachusetts LIHTC may
code LFSFDA on the Schedule CMS. more information, see TIRs 13-6, 11-6, and 08- also be subject to recapture. The LIHTC is not re-
23. fundable.
Life Sciences Refundable Investment Tax To claim the LSRJTC, complete a Schedule RLSC For taxpayers subject to a minimum excise under
Credit and enter the amount of LSRJTC using credit MGL ch 63, the LIHTC may not reduce the excise
Certified life sciences companies subject to tax code LFSJOB on Schedule CMS. due below the minimum amount.
under MGL ch 63, to the extent authorized by the
Life Sciences Tax Incentive Program, may claim Life Sciences Research Tax Credit To claim the LIHTC, enter the LIHTC certificate
a Life Sciences Refundable Investment Tax Credit Certified life sciences companies subject to tax number and the amount of LIHTC using credit
(LSRITC) equal to 10% of the cost of qualifying under MGL ch 63, to the extent authorized by the code LOWINC on Schedule CMS. Supporting
property acquired, constructed, reconstructed, or Life Sciences Tax Incentive Program, may claim documentation must be enclosed with the return
erected and used exclusively in Massachusetts. If a Life Sciences Research Tax Credit (LSRTC) for or the LIHTC may be disallowed. For further in-
the LSRITC exceeds the tax due, 90% of the bal- certain expenditures that do not qualify for the formation on documentation see the Transfer
ance of the LSRITC may, at the option of the tax- MGL ch 63, § 38M Research Tax Credit (RC). The LIHC: Low-Income Housing Credit Statement
payer and to the extent authorized pursuant to the LSRTC generally is calculated in the same man- Form and Allotment Schedule LIHC: Low-Income
Life Sciences Tax Incentive Program, be refund- ner as the RC, but may also include expenditures Housing Credit Summary Form. For further infor-
able to the taxpayer for the tax year in which the for research related to legally mandated clinical mation regarding this credit, contact DHCD, Divi-
qualified property giving rise to the LSRITC is trial activities performed both inside and outside sion of Private Housing, at (617) 727-7824.
placed in service. If the taxpayer does not opt to of Massachusetts. Unlike the RC, the LSRTC is
make the LSRITC refundable, then the LSRITC not refundable for certified life sciences compa- Low Income Housing Donation Tax Credit
may be carried forward for up to 10 years. Certi- nies. See the Research Credit summary below. Taxpayers subject to tax under MGL ch 63 that
fied life sciences companies qualifying for the The LSRTC is not transferrable. However, unused make a “qualified donation” of real or personal
Economic Development Incentive Program Credit portions of the LSRTC may be carried forward for property to certain non-profit entities for use in
(EDIPC) may only take the EDIPC to the extent of 15 years. In the event of the revocation of a com- purchasing, constructing or rehabilitating a “qual-
an additional 2% of the cost of the qualifying pany’s certification as a life sciences company or ified Massachusetts project” may be eligible to
property. In the event a company’s certification as other disqualifying events, the LSRTC may be claim a Low Income Housing Donation Tax Credit
a life sciences company is revoked, the recapture subject to recapture. For certified life sciences (LIHDTC). This credit operates in a similar man-
of the LSRITC may be required. The LSRITC is companies subject to a minimum excise, the ner to the Low Income Housing Tax Credit
not transferrable. For certified life sciences com- LSRTC cannot reduce the amount of the excise (LIHTC), but the LIHDTC is limited to 50% of the
panies subject to a minimum excise, the LSRITC due to less than the minimum amount. For fur- amount of the “qualified donation,” which may be
cannot reduce the amount of the excise due to ther information, see TIRs 13-6 and 08-23. increased to 65% by the Department of Housing
and Community Development (DHCD). In addi-
less than the minimum amount. For further infor- To claim the LSRTC, complete a Schedule RLSC tion, the LIHDTC may only be claimed in the year
mation, see TIRs 13-6 and 08-23. and enter the amount of LSRTC using credit code that the “qualified donation” is made. However,
To claim the LSRITC, complete a Schedule RLSC LFSRDC on Schedule CMS. any unused LIHDTC may be carried forward for
and enter the amount of LSRITC using credit the next 5 years. DHCD determines eligibility and
code LFSITC on Schedule CMS. Low Income Housing Tax Credit
Taxpayers subject to tax under MGL ch 63 who ultimately allocates the LIHDTC a taxpayer may
Life Sciences Refundable Jobs Tax Credit invest in a qualified low-income housing project claim based on a total pool of $20,000,000
Certified life sciences companies subject to tax located in Massachusetts may be eligible for the shared with the LIHTC. Only one-fifth of awarded
under MGL ch 63, to the extent authorized by the Low Income Housing Tax Credit (LIHTC). The De- LIHDTC will count towards this pool. The LIHDTC
Life Sciences Tax Incentive Program, may receive partment of Housing and Community Develop- is not refundable but is transferrable in the same
a Life Sciences Refundable Jobs Tax Credit (LSR- ment (DHCD) determines which low-income manner as the LIHTC.
JTC) in an amount determined by the Massachu- housing projects will qualify for the LIHTC, which The property must also meet the requirements
setts Life Sciences Center in consultation with the properties may generate an LIHTC for investors, established by Massachusetts and federal laws
DOR. A taxpayer claiming the LSRJTC must com- and ultimately allocates the amount of credit a and be owned by an owner who enters into a reg-
mit to the creation of a minimum of 50 net new taxpayer may claim based on a total pool of ulatory agreement with DHCD. If an event or cir-
permanent full-time positions in Massachusetts. $20,000,000. The LIHTC may be claimed in the cumstance occurs that results, or would have
If the LSRJTC claimed by a taxpayer exceeds the year that a “qualified Massachusetts project” is resulted, in the recapture of any portion of a fed-
tax otherwise due, 90% of the balance of such placed in service and for each of the four subse- eral Low Income Housing Credit, then the Mass-
LSRJTC may, at the option of the taxpayer and to quent taxable years. The properties must also achusetts LIHDTC may also be subject to

- 10 -

recapture. For taxpayers subject to a minimum to reduce their tax due to below the minimum (VHTC). The credit is equal to $2,000 for each
excise under MGL ch 63, the LIHDTC may not re- amount. However, credits in excess of the tax- qualified veteran hired. The business must em-
duce the excise due below the minimum amount. payer’s liability may be carried over for 15 years, ploy fewer than 100 employees; be certified by
To claim the LIHDTC, enter the LIHDTC certificate while credits not used because of the 75% rule the Commissioner of Veteran’s Services; and
number and the amount of LIHDTC using credit may be carried over indefinitely. The deduction al- qualify for and claim the federal Work Opportunity
code LIHDON on Schedule CMS. Supporting doc- lowed to a corporation for any research expenses Credit allowed under IRC § 51. A business may
umentation must be enclosed with the return or generating an RC must be reduced by the amount be eligible for a second VHTC for the next taxable
the LIHDTC may be disallowed. For further infor- of RC generated. This amount is added back to year if the veteran continues to work for the busi-
mation on documentation see the Transfer LIHC: income on Schedule E, line 13. ness. In order to claim the VHTC, the primary
Low-Income Housing Credit Statement Form and Certified life sciences companies that have an RC place of employment and the primary residence
Allotment Schedule LIHC: Low-Income Housing that exceeds the amount of the credit that may be of the qualified veteran must be in Massachu-
Credit Summary Form. For further information re- claimed under MGL ch 63, § 38M for a taxable setts, and the business corporation must obtain
garding this credit, contact DHCD, Division of Pri- year may, to the extent authorized under the Life certification that the veteran is a qualified veteran,
vate Housing, at (617) 727-7824. Sciences Tax Incentive Program, elect to make as defined in IRC § 51(d)(3), from the Depart-
90% of the balance of the remaining credits re- ment of Career Services, no later than the em-
Medical Device Tax Credit fundable. See TIR 08-23, section 5. ployee’s first day of work.
Medical Device Companies taxable under MGL ch The VHTC is neither refundable nor transferrable.
63 may be eligible to claim a Medical Device Tax To claim the RC, complete Schedule RC and enter
Credit (MDTC). The MDTC is equal to 100% of the amount of RC using credit code REARCH on Any amount of VHTC that exceeds the tax due in
the user fees actually paid by the medical device Schedule CMS. Include both the completed the current taxable year may be carried forward
company to the United States Food and Drug Ad- Schedule RC and Schedule CMS with the return. to any of the 3 subsequent taxable years. The
VHTC is available for qualified veterans hired after
ministration (FDA). To qualify for the MDTC, the Vanpool Credit July 1, 2017. A business subject to a minimum
user fees must be paid during the tax year for Business corporations subject to tax under MGL excise under MGL ch 63 cannot use the credit to
which the tax is due for pre-market submissions ch 63 may be eligible for a Vanpool Credit (VPC) reduce its tax due to below the minimum amount.
(e.g., applications, supplements, or 510(k) sub- equal to 30% of the cost incurred during the tax- See TIR 17-10 for further information.
missions) to market new technologies developed able year for the purchase or lease of company To claim the VHTC, enter the VHTC certificate
or manufactured in Massachusetts. The MDTC shuttle vans used by the corporation in an em- number and the amount of VHTC using credit
may not be carried forward to subsequent tax ployer-sponsored ride sharing program in Mass- code VETHIR on Schedule CMS.
years. The MDTC is not refundable. However, un- achusetts. The company shuttle vans must be
used portions of the MDTC may be transferred to situated in Massachusetts on the last day of the Signature
a purchasing company, who may carry over the corporation's taxable year and used to bring em- When the form is complete, it must be signed by
MDTC but must use it within 5 years of the is- ployees from their homes to their jobs or stu- the treasurer or assistant treasurer. If you are
suance of the certificate. The purchasing com- dents from a public transportation facility to a signing as an authorized delegate of the appro-
pany may not transfer the MDTC. The MDTC may school campus in Massachusetts. The amount of priate corporate officer, check the box in the sig-
not reduce the purchasing company’s corporate VPC will be prorated for property disposed of or nature section and attach a Massachusetts Form
excise due below the minimum excise. no longer having a qualified use prior to the end M-2848, Power of Attorney.
To claim the MDTC, enter the MDTC certificate of the tax year. Additionally, the VPC will be re-
number and the amount of MDTC using credit captured if the property on which the VPC has
code MEDDVC on Schedule CMS. Certificate ap- been taken is disposed of or the property ceases
plication forms and additional information are to be in qualified use prior to the end of its useful
available at mass.gov/dor. life. No recapture is necessary if the property has
been in qualified use for more than 4 consecutive
Research Credit years. The VPC is neither refundable nor trans-
Business corporations subject to an excise under ferrable. For corporations subject to the corporate
MGL ch 63 that incur “qualified research ex- excise, the VPC may not reduce the corporate ex-
penses” and “basic research payments” may be cise due below the minimum amount, nor may
able to claim a Research Tax Credit (RC). The RC the amount of VPC allowable in any one tax year
closely parallels the federal research credit. Gen- exceed 50% of the corporation’s corporate excise
erally, “qualified research expenses” include liability.
wages paid to employees, a portion of wages paid
to contractors, and amounts paid for supplies, To claim the VPC, complete Schedule VP and
but only if the services were performed for re- enter the amount of VPC using credit code VAN-
search purposes or the supplies were used to POL on Schedule CMS. Include both the com-
conduct research in Massachusetts. The RC pleted Schedule VP and Schedule CMS with the
amount is limited to the first $25,000 of excise return.
due, plus 75% of any excise due in excess of Veteran’s Hire Tax Credit
$25,000. The RC is neither refundable nor trans- Businesses subject to tax under MGL ch 63 that
ferrable. Business corporations subject to a mini- hire veterans who live and work in Massachusetts
mum excise under MGL ch 63 cannot use the RC may be eligible for a Veteran’s Hire Tax Credit

PDF file checksum: 3082021324

(Plugin #1/9.12/13.0)