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What is Included in Massachusetts Other Credits?

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What is Included in Massachusetts Other Credits?

Answer

See Schedule CMS for a complete list:

Angel Investor Credit Taxpayers subject to tax under MGL ch 62 may be eligible for an Angel Investor Credit (AIC) equal to 20% of the amount of qualifying investments in a qualifying business, and 30% of the amount of qualifying investments made by a taxpayer investor in a qualifying business located in a “gateway municipality” as defined in MGL ch 23A, § 3A. The taxpayer must be an accredited investor, as defined in 15 USC § 77b (15)(ii), who is not the principal owner of the qualifying business and who is not involved in the qualifying business as a full-time professional activity. For purposes of the AIC, a taxpayer may invest up to $125,000 per qualifying business per year up to a maximum of $250,000. A taxpayer cannot claim more than $50,000 of the AIC for a single calendar year. The credit may be taken in either the tax year of the initial investment or may be carried forward to any of the three subsequent taxable years, as long as the qualifying business maintains its principal place of business in Massachusetts. If the qualifying business does not maintain its principal place of business in Massachusetts for this three-year period, the taxpayer investor must repay the total amount of AIC claimed. The AIC is not transferable nor refundable. The Massachusetts Life Sciences Center is responsible for determining eligibility for the AIC and the actual amount awarded to a taxpayer. See TIR 16-15 for further information. To claim the AIC, enter the AIC certificate number and the amount of AIC using credit code AGLCRD on the Schedule CMS.

Brownfields Tax Credit Taxpayers subject to tax under MGL ch 62 and nonprofit organizations may be eligible to claim a Brownfields Tax Credit (BTC) for amounts expended to clean up contaminated property in Massachusetts in an amount equal to either 25% or 50% of the cost. The cleanup must begin on or before August 5, 2023, and costs must be incurred before January 1, 2024, and equal or exceed 15% of the assessed value of the property before the beginning of the cleanup. Contaminated properties must be owned or leased for business purposes, reported to the Department of Environmental Protection (DEP), cleaned up in compliance with DEP’s standards, and located in an economically distressed area identified by DEP. Unused portions of the BTC may be carried forward for the next five years. If a credit recipient does not maintain the property in compliance with standards set out by DEP, the credit may be recaptured. The BTC is not refundable. The BTC may be transferred, sold or assigned to another taxpayer with a liability under MGL ch 62 or 63, or to a nonprofit organization. A taxpayer must complete a Form BCA, Brownfields Credit Application, and submit it to DOR. If approved, DOR will issue a certificate reflecting the amount of the BTC. The party receiving the BTC must include the certificate number with each tax return in which the credits are being applied. BTC application forms and additional information are available at mass.gov/dor. To claim the BTC, enter the BTC certificate number and the amount of the BTC using credit code BRWFLD on the Schedule CMS.

Certified Housing Development Tax Credit Taxpayers subject to tax under MGL ch 62 that invest in housing development projects in Massachusetts may be eligible to claim the Certified Housing Development Credit (CHDC) in an amount up to 25% of the costs of qualified project expenditures as defined in MGL ch 40V, § 1. Eligibility and the amount of CHDC awarded are determined and administered by the Department of Housing and Community Development (DHCD). The CHDC is not refundable, but unused amounts may be transferred or carried forward for 10 years. See TIRs 16-15, 10-15 and 10-14 for further information. To claim the CHDC, enter the CHDC certificate number and the amount of the CHDC using credit code CRTHOU on the Schedule CMS.

Community Investment Tax Credit Taxpayers subject to tax under MGL ch 62 may be able to claim a Community Investment Tax Credit (CITC) for cash contributions made to a community partner to support the implementation of its community investment plan, or to a community partnership fund. The CITC is equal to 50% of the total contribution made by the taxpayer and cannot be claimed for contributions of less than $1,000. The Department of Housing and Community Development (DHCD) is responsible for determining which contributions qualify for the CITC and the actual amount of the CITC awarded. The CITC is not transferrable. However, the CITC is refundable, or, alternatively, may be carried forward for 5 years. See DHCD’s Community Investment Grant and Tax Credit Program regulation, 760 CMR 68.00, DOR’s Community Investment Tax Credit regulation, 830 CMR 62.6M.1, and TIRs 16-15 and 13-15 for further information. To claim the CITC, enter the CITC certificate number and the amount of the CITC using credit code CMMINV on the Schedule CMS.

Conservation Land Tax Credit Taxpayers subject to tax under MGL ch 62 that make qualified donations of certified land to a public or private conservation agency in Massachusetts may be eligible for a Conservation Land Tax Credit (CLTC). The Executive Office of Energy and Environmental Affairs (EEA) ultimately determines which donations qualify for the CLTC and the actual amount of the CLTC attributable to the donation. The CLTC is equal to 50% of the fair market value of the donated certified land, but may not exceed $75,000. The credit is refundable, but is not transferable. Taxpayers who claim the CLTC may not claim any other credit or deduction in the same tax year for the costs related to the same donated, certified land. For more information, please see the EEA’s Conservation Land Tax Credit regulation, 301 CMR 14.00, which sets forth the EEA’s criteria for authorizing and certifying the credit. See also DOR’s Conservation Land Tax Credit regulation, 830 CMR 62.6.4, which explains the calculation of the allowable CLTC. To claim the CLTC, enter the CLTC certificate number and the amount of the CLTC using credit code CNSLND on Schedule CMS.

Dairy Farm Tax Credit Massachusetts dairy farmers taxable under MGL ch 62 may be eligible for a Dairy Farm Tax Credit (DFTC) based on the amount of milk produced and sold during the taxable year when the cost of milk drops below a price based on federal standards. The dairy farm must have a certificate of registration as a Massachusetts dairy farmer from the Massachusetts Department of Agricultural Resources (MDAR).The total amount of DFTC granted through the program cannot exceed $6,000,000 in any year. The DFTC is refundable, but is not transferrable. To claim the DFTC, enter the MDAR-issued certificate number and the amount of the DFTC from the MDAR’s Dairy Farmer Certified Tax Credit Statement using credit code DAIFRM on Schedule CMS.

Economic Opportunity Area/ Economic Development Incentive Program Credits Economic Opportunity Area Credit Taxpayers subject to tax under MGL ch 62 that participated in projects certified by the Economic Assistance Coordinating Council (EACC) before January 1, 2010, may be eligible to claim a an Economic Opportunity Area Credit (EOAC) equal to 5% of the cost of qualifying property purchased for business use within a certified project within an Economic Opportunity Area (EOA). To qualify for the EOAC, the property must be used exclusively by the certified project in an EOA and must meet the same tests imposed for the 3% Investment Tax Credit (ITC). A certified project is a project approved by the EACC. The 5% EOAC cannot offset more than 50% of the tax due. Any unused EOAC may be carried forward for 10 years. The EOAC may be subject to recapture if a taxpayer’s business is decertified by the EACC, or a taxpayer stops using the qualifying property in a certified project before the end of the property’s useful life. The EOAC is neither refundable nor transferrable. The EOAC is not available to certified projects that were certified by the EACC on or after January 1, 2010. See TIRs 16-15 and 10-01 for further information. To claim the EOAC, complete Schedule EOAC and enter the amount of the credit using credit code EOACCR on the Schedule CMS. Include both the completed Schedule EOAC and Schedule CMS with the return.

Economic Development Incentive Program Credit For projects certified by the EACC on or after January 1, 2010 and before January 1, 2017, the Economic Development Incentive Program Credit (EDIPC) is available to taxpayers subject to tax under MGL ch 62 with respect to certified projects as defined under MGL ch 23A. The EDIPC is equal to a percentage of the cost of qualifying property purchased by a certified project for business use within Massachusetts. As part of the project certification, the EACC may (but is not required to) award a credit under the program and determine the percentage of the cost of the property to be used to determine the credit. In addition the EACC may award an EDIPC that is refundable. To qualify for the EDIPC, the qualifying property must be used exclusively in the certified project in Massachusetts and must meet the same tests imposed for the 3% ITC. Unless the EDIPC awarded is refundable, the credit may not offset more than 50% of the tax due. Carryover of unused credit is available only to the extent authorized by the EACC. The EACC may, in consultation with DOR, limit (but not expand) the EDIPC to a specific dollar amount or time duration or in any other manner deemed appropriate by the EACC. St. 2009, c. 166, § 18. For example, the EACC may limit the EDIPC available with respect to a particular project to a specific dollar maximum, even if the actual dollar amount of the qualifying purchases would otherwise generate a higher credit amount. Similarly, the EACC may limit the otherwise applicable credit carry forward period provided by MGL ch 62, § 6(g). The EDIPC may be subject to recapture if a taxpayer’s business is decertified by the EACC, or a taxpayer stops using the qualifying property in a certified project before the end of the property’s useful life. The EDIPC is not transferable. See TIRs 16-15, 14-3, 10-15, and 10-1 for further information. To claim the EDIPC, complete Schedule EDIP and enter the amount of the EDIPC using credit code EDIPCR on Schedule CMS. Also, enter the EACC-issued certificate number on Schedule CMS. Include both the completed Schedule EDIP and Schedule CMS with the return.

EDIP Credit for Projects Certified on or after January 1, 2017 The EDIPC provisions were significantly changed for projects certified on or after January 1, 2017. For projects certified by the EACC on or after January 1, 2017, the EDIPC allowed to taxpayers subject to tax under MGL ch 62 is determined by the EACC based on numerous factors set forth in MGL ch 23A § 3D. The EACC may award a refundable EDIPC to any certified project. Carryover of unused EDIPC is available only to the extent authorized by the EACC. Recapture is required only if the EACC revokes the certification of a project. The EDIPC is not transferable. See TIRs 16-15 and 10-01 for further information. To claim the EDIPC, complete Schedule EDIP and enter the amount of the EDIPC using credit code EDIPCR on Schedule CMS. Also, enter the EACC-issued certificate number on Schedule CMS. Include both the completed Schedule EDIP and Schedule CMS with the return.

Farming and Fisheries Credit Taxpayers primarily engaged in agriculture or farming and subject to tax under MGL ch 62 may be eligible for a Farming and Fisheries Credit (FFC) equal to 3% of the cost or other basis for federal income tax purposes of qualifying property acquired, constructed or erected during the tax year. Qualifying property is defined as tangible personal property and other tangible property, including buildings and structural components thereof which are located in Massachusetts, used solely in farming, agriculture or fishing, and are depreciable with a useful life of at least 4 years. Lessees are also eligible for the FFC. However, where the lessee is eligible for the FFC, the lessor is generally not eligible, with the exception of “equine-based businesses where care and boarding of horses is a function of the agricultural activity.” A taxpayer may carry forward any unused portion of the FFC for up to three years. See TIR 14-3 for further information. To claim the FFC, complete Schedule FAF, Farming and Fisheries Credit, and enter the amount of the FFC using credit code FRMFSH on Schedule CMS. Include both the completed Schedule FAF and Schedule CMS with the return.

Film Incentive Credit Motion picture production companies subject to tax under MGL ch 62 may be eligible to claim the Film Incentive Credit (FIC) for certain payroll and production expenses. Production companies that incur at least $50,000 of production costs in Massachusetts are eligible for a credit equal to 25% of the total Massachusetts payroll for the production, excluding salaries of $1 million and higher. In addition, production companies whose Massachusetts production expenses exceed 50% of the total production cost may receive a credit equal to 25% of the total Massachusetts production expense. The FIC may be applied against taxpayer's liability, reduced by any other available credits, and then 90% of any remaining credits may be refunded. Subject to certain conditions, unused credits may be carried over, refunded, or transferred by the taxpayer for the following 5 tax years. Transferees may carry forward unused FIC for the 5 tax years subsequent to the first tax year the FIC was allowed to the initial transferor. The FIC is not refundable to the transferee. See TIR 07-15 for further information. To claim the FIC, enter the FIC certificate number and the amount of the FIC using credit code FLMCRD on the Schedule CMS. Supporting documentation must be made available to DOR upon request. Certificate application forms and additional information are available at mass.gov/dor.

Historical Rehabilitation Credit Taxpayers subject to tax under MGL ch 62 who have made qualified expenditures in the rehabilitation of a qualified historic structure may be eligible to claim a Historic Rehabilitation Tax Credit (HRTC). The HRTC is up to 20% of the taxpayer’s rehabilitation expenditures made in substantially rehabilitating a historic structure that has received final certification from the Massachusetts Historical Commission and placed into service (where occupancy of the entire structure or some identifiable portion of it is permitted). Unused portions of the HRTC may be carried forward for the next five tax years. The HRTC may be transferred or sold to another taxpayer, but is not refundable. HRTC awards also may be transferred to other qualifying taxpayers that acquire a historic structure, as long as certain criteria are met. The HRTC may be subject to recapture if the taxpayer disposes of its interest in the structure within five years of its placement into service. HRTC awards however are not subject to recapture. For further information, see DOR’s Massachusetts Historic Rehabilitation Tax Credit regulation, 830 CMR 63.38R.1, and TIRs 16-15 and 10-11. To claim the HRTC, enter the HRT certificate number and the amount of the HRTC using credit code HISRHB on the Schedule CMS. Supporting documentation must be enclosed with the return or the HRTC may be disallowed. For further information on documentation see the 2018 Transfer/ Sale HRC: Historic Rehabilitation Credit Certificate Form and 2018 Allotment Schedule HRC: Historic Rehabilitation Credit Summary Form.

Lead Paint Tax Credit Taxpayers subject to tax under MGL ch 62, who own residential premises in Massachusetts, constructed prior to 1978 and who incurred expenses for covering or removing lead paint on such residential premises, may claim a Lead Paint Tax Credit (LPTC) for these expenses in an amount equal to up to $1,500 for each residential unit. A taxpayer may carry forward any unused portion of the LPTC for up to 7 taxable years. See DOR’s Lead Paint Removal Credit regulation, 830 CMR 62.6.3, and other rules as explained on Massachusetts Schedule LP, Credit for Removing or Covering Lead Paint on Residential Premises. To claim the LPTC, complete Schedule LP and enter the amount of the LPTC using credit code LEDPNT on the Schedule CMS. Be sure to enter in line 1a of the Schedule CMS the total number of units indicated in Schedule LP, lines 1a and 3a. Include both the completed Schedule LP and Schedule CMS with the return.

Life Sciences Refundable Jobs Tax Credit Certified life sciences companies subject to tax under MGL ch 62, to the extent authorized by the Life Sciences Tax Incentive Program, may receive a Life Sciences Refundable Jobs Tax Credit (LSRJTC) in an amount determined by the Massachusetts Life Sciences Center in consultation with DOR. A taxpayer claiming the LSRJTC must commit to the creation of a minimum of 50 net new permanent full-time positions in Massachusetts. If the LSRJTC claimed by a taxpayer exceeds the tax otherwise due, 90% of the balance of such LSRJTC may, at the option of the taxpayer and to the extent authorized by the Life Sciences Tax Incentive Program, be refundable. Excess LSRJTC cannot be carried forward to subsequent taxable years. The LSRJTC is not transferrable. The LSRJTC is subject to all of the requirements of the Life Sciences Tax Incentive Program under MGL ch 23I. In the event of the revocation of a company’s certification as a life sciences company or other disqualifying events, the LSRJTC may be subject to recapture. For more information, see TIRs 13-6, 11-6, and 08-23. To claim the LSRJTC, complete a Schedule RLSC and enter the amount of the LSRJTC using credit code LFSJOB on the Schedule CMS.

 


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Views: 1146 Created on: Jun 15, 2013
Date updated: Dec 24, 2018
Posted in: States, Massachusetts

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