Research and Development Tax Credit

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Applications for Tax Year 2025 will be available on the online portal beginning June 1, 2026 through November 16, 2026.

Businesses that have qualified R&D expenditures in Maryland may qualify for the R&D Tax Credit.

The tax credit remains in effect until January 31, 2031, subject to extension by the General Assembly. BENEFIT

The tax credit is equal to ten percent (10%) of eligible R&D expenses incurred during the taxable year in excess of the Maryland Base Amount. If the total credits applied for exceed the statutory caps, the business's R&D tax credit is prorated. The total statutory cap is $12 million with a small business set-aside of $3.5 million. A single applicant may not receive a tax credit exceeding $250,000. ELIGIBILITY

The Maryland Department of Commerce (Commerce) follows the federal definition of qualified R&D and qualified R&D expenses. To qualify the business must incur Qualified Research and Development Expenses, as defined by § 41(b) of the Internal Revenue Code, in Maryland. The business must submit an application to Commerce by November 15th for expenses incurred in the previous calendar year.

A small business means a for profit corporation, limited liability company, partnership or sole proprietorship with net book value assets totaling, at the beginning or the end of the taxable year for which the Maryland Qualified Research and Development expenses are incurred, as reported on the balance sheet, less than $5,000,000. Small Business Refund

R&D tax credits certified after December 15, 2012 are refundable for small business to the extent that the tax credits exceed the income tax liability for that taxable year. APPLY

To qualify for the R&D tax credit, a business must submit an application NO LATER THAN NOVEMBER 15 of the calendar year following the tax year in which the Maryland Qualified Research and Development expenses were incurred.

In addition, small businesses must submit documentation showing they had net book value assets, at the beginning or end of the tax year for which Maryland Qualified Research and Development, as reported on the balance sheet, of less than $5 million.

Commerce will prorate if the credits applied for by non-small businesses exceeds $8.5 million and/or if the total amount of credits applied for by small businesses exceeds $3.5 million.

Commerce will issue a tax credit certificate with the approved credit amount by February 15th of the calendar year following the end of the year in which a business submits an application.

Because application dates follow the filing date for taxes, after receiving certification, the business may file an amended tax return for the year it is certified or it may claim the credit on an income tax return filed for any of the following 7 tax years. The business must attach a copy of the Department's certification to its tax return. RESOURCES

Maryland Code, Tax-General § 10-721 CONTACT

For more information about the R&D Tax Credit contact:

Amy Poad

Tax Specialist

Department of Commerce

401 E. Pratt Street

Baltimore, MD 21202

Amy. Poad@maryland.gov

410-767-0429 FREQUENTLY ASKED QUESTIONS

Page Image What is the Research and Development Tax Credit Program? Maryland’s Research and Development Tax Credit program provides income tax credits to businesses that invest in research and development in Maryland. The total amount of credits depends on the amount of eligible expenses incurred with a limit of $12 million for all businesses that apply. How much credit does a business receive? The business will receive 10% of Maryland qualified R&D expenses…

Topic areas: General and Cross-cutting R&D.

Funding amount

This grant provides Varies in funding.

Deadline

Applications are accepted on a rolling basis; there is no single fixed deadline.

Who can apply

This opportunity is open to the following applicant types:

• Not specified by the program.

Eligibility

The program did not publish a separate eligibility statement. See the official opportunity page for the full eligibility criteria.

Agency

Research and Development Tax Credit is administered by Maryland Department of Commerce (MD Commerce), listed via Maryland Department of Commerce.