Maine Business Score Big with R&D Tax Credits

The Pine Tree State laws offer companies generous research and development tax credits that benefit companies of any size.

Modern company owners not only have to navigate the fast-paced business world, but also have to constantly keep up with industry processes and techniques to stay competitive. What countless companies don’t know is that many US companies who innovate and experiment qualify to receive state and federal Research and Development tax credits.
This extensive tax credit program was established in the early 1980’s to reward trailblazing companies, with states adding their own programs soon afterward. In exchange for R&D work, businesses of any size can receive significant dollar for dollar reductions in tax liability.
R&D is not limited to large companies. In fact, Maine has very few large companies that are headquartered within the state’s borders. Small and medium businesses operating in Maine are in a unique position to take advantage of R&D while still maintaining a connection with the local economy. The biggest economic drivers of the state in 2020 were agriculture, fishery, healthcare, healthcare, tourism, and mining. Each of these industries can leverage Research and Development tax credits for the innovative activities they practice in their prospective fields.
According to the State website, Maine’s Research Expense tax credits follow the federal IRS R&D tax credits and are applied when the company submits its state corporate tax return. Maine offers its tax credits for qualified research activities taking place in the state and also offers a super research and development tax credit.

Maine Research and Development Activities Facts:

  • Activities must have occurred in the state of Maine in order to qualify
  • Maine’s Research Expense tax credit is limited to 5% of the excess qualified research expenses that exceed the previous three-year average and 7.5% of basic research payments
  • The credit is also limited to 100% of the first $25k in tax liability plus 75% of the liability over $25k
  • Carryforward is up to 15 years

How to Claim Maine’s R&D Tax Credits

National Tax Group tax professionals lead Maine businesses through a clear step-by-step process to see if they qualify for R&D tax credits. Give our tax specialists a call at (561) 257-3436 to schedule your free initial assessment.

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