State R&D Tax Credits

Maine

Credit Name: §5219-K. Research expense tax credit; and §5219-L. Super credit for substantially increased research and development

Expiration Date: Both are permanent

Does it apply to C corps and pass-through entities?: Yes

Credit Carry forward:

§5219-K Carry forward 15 years

§5219-L Carry forward 5 years

Description: §5219-K: The credit equals 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). “Base amount” means the average amount per year spent on qualified research expenses over the previous 3 taxable years by the taxpayer. 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 ME.

§5219-L: Taxpayers that qualify for the research expense tax credit and are allowed an additional credit 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 June 12, 1997.

Other Notes:

§5219-K:

• The credit cannot reduce the tax due to less than zero.
• The credit is limited to 100% of a corporation’s first $25,000 of tax due, plus 75% of the corporation’s tax due, as determined in excess of $25,000.
• Must attach supporting documentation.

§5219-L:

• The credit is limited to 50% of the taxpayer’s tax due after the allowance of any other credits.
• The credit may not be used to reduce the taxpayer’s tax liability to less than the amount of tax due in the preceding taxable year after the allowance of any credits.