Maine R&D Tax Credit Summary

 

Maine offers Research and Development Tax Credit for qualified research conducted in the state of Maine. The Maine R&D Tax Credit leverages off of the federal Section 41 rules surrounding credits for increasing research activities.  Qualified research expenses are limited to those expenses incurred in the state of Maine. 

In Maine, two credits are available to taxpayers who have incurred certain research expenses include: 

(1) Research Expense Tax Credit (statute 36 §5219-K)

  • A taxpayer is allowed a credit against the tax due under this Part equal to the sum of 5% of the excess, if any, of the qualified research expenses for the taxable year over the base amount and 7.5% of the basic research payments determined under the Code, Section 41(e)(1)(A).

    • The term "base amount" means the average amount per year spent on qualified research expenses over the previous 3 taxable years by the taxpayer. As used in this section, unless the context otherwise indicates, the terms "qualified research expenses," "qualified organization base period amount," "basic research" and any other terms affecting the calculation of the credit have the same meanings as under the Code, Section 41, but apply only to expenditures for research conducted in this State.

    • In determining the amount of the credit allowable under this section, the State Tax Assessor may aggregate the activities of all corporations that are members of a controlled group of corporations, as defined by the Code, Section 41(f)(1)(A) and in addition may aggregate the activities of all entities, whether or not incorporated, that are under common control, as defined by the Code, Section 41(f)(1)(B).

(2) Super Research and Development Credit (statute 36 §5219-L).

  • For tax years beginning before January 1, 2014, a taxpayer that qualifies for the research expense tax credit allowed under section 5219-K is allowed an additional credit against the tax due under this Part equal to the excess, if any, of qualified research expenses for the taxable year over the super credit base amount.

    • For purposes of this section, "super credit base amount" means the average amount spent on qualified research expenses by the taxpayer in the 3 taxable years immediately preceding the effective date of this section, increased by 50%.

    • For purposes of this section, "qualified research expenses" has the same meaning as under the Code, Section 41 but applies only to expenditures for research conducted in this State.

Eligible Entities: C-Corporations, S-Corporations, LLCs, Partnerships

Deadline for Tax Filing: Due with Maine Tax Return

Data Required to Compute Credit

  • Claim Period Qualified R&D Expenses (QREs)

  • QREs for Prior 3 Years

Credit Carryforward:

  • Research Expense Tax Credit

    • ​The credit cannot be carried back, but can be carried forward for up to 15 years

    • The credit allowed under this section for any taxable year may not reduce the tax due to less than zero.

    • The credit allowed under this section is limited to 100% of a corporation's first $25,000 of tax due, as determined before the allowance of any credits, plus 75% of the corporation's tax due, as determined in excess of $25,000. The assessor shall adopt rules similar to those authorized under the Code, Section 38(c)(5)(B) for purposes of apportioning the $25,000 among members of a controlled group.

  • Super Research and Development Credit

    • May carry over and apply to the tax due for any one or more of the next succeeding 10 taxable years the portion, as reduced from year to year, of any unused credit, but in no event may the credit applied in any single year exceed 25% of the taxpayer's tax due after the allowance of any other credits taken pursuant to this chapter.

    • The credit allowed under this section is limited to 50% of the taxpayer's tax due after the allowance of any other credits taken pursuant to this chapter.

    • The credit provided by this section may not be used to reduce the taxpayer's tax liability under this Part to less than the amount of the taxpayer's tax due in the preceding taxable year after the allowance of any credits taken​

Refundable/Transferable Tax Credit: No

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