Research Expense Tax Credit Worksheet - 2011 (Page 2 of 2) in pdf

2011

RESEARCH EXPENSE TAX CREDIT

WORKSHEET INSTRUCTIONS

This credit is available to businesses that spend money for research in Maine. The credit equals 5% of qualiﬁ ed research

expenses in excess of the base amount (the base amount is the average research expense for the last three years) plus 7.5%

of basic research payments (relating to research performed by qualiﬁ ed universities or scientiﬁ c research organizations).

This credit applies only to the amount spent on research conducted in Maine. “Qualiﬁ ed research” and “qualiﬁ ed research

expenses” are deﬁ ned by the Internal Revenue Code § 41. “Basic research payments” are determined in accordance with

the Code § 41(e)(1)(A). The credit cannot reduce the tax liability, excluding minimum tax, below zero. For corporations,

the credit is limited to 100% of the ﬁ rst $25,000 in income tax determined before other credits, plus 75% of the tax amount

in excess of $25,000. Any unused credit amount may be carried forward for a total of 15 years. Special rules apply to

corporations that are members of a controlled group as deﬁ ned by the Code § 41(f)(1)(A) and to corporations that ﬁ le a

Maine combined return.

In the case of pass-through entities (partnerships, LLCs, S corporations, trusts, etc.), the partners, members, shareholders,

beneﬁ ciaries or other owners are allowed a credit in proportion to their respective interest in these entities.

SPECIFIC LINE INSTRUCTIONS

Enter the taxpayer name and employer identiﬁ cation number (“EIN”) or social security number (“SSN”).

Line 1.

Enter the basic research payments in excess of the federal base that were spent for research conducted in

Maine included on federal Form 6765, Section A, line 4 or Form 6765, Section B, line 21. If the qualifying

research is conducted both in and outside Maine, subtract the Maine portion of the federal base period amounts

included on federal Form 6765, lines 3 and 20 from the Maine portion of the federal basic research payments

included on federal Form 6765, lines 2 and 19. Enter the result on line 1 of the worksheet.

Line 3.

Enter total qualiﬁ ed research expenses applied to research conducted in Maine during the taxable year included

on federal Form 6765, Section A, line 9 or Form 6765, Section B, line 28.

Line 4.

Enter the qualiﬁ ed research expenses applied to research conducted in Maine for the three prior tax years.

This is the base amount for purpose of calculating the qualiﬁ ed research expense credit. If any of the three prior

tax years is a short year, the qualiﬁ ed research expenses must be prorated according to federal regulations.

Line 7.

Enter the amount from your 2010 Research Expense Tax Credit worksheet, line 11.

Line 8.

If a taxable corporation’s tax liability exceeds $25,000 (before other credits), the corporation must enter on

line 8 the lesser of the total of lines 2, 6 and 7 or the total of $25,000 plus 75% of the tax liability (before other

credits) exceeding $25,000.

Lines 9-11. For individuals and for taxable corporations with a tax liability of no more than $25,000, the credit is limited to

the tax liability of the taxpayer. If a taxable corporation with a tax liability in excess of $25,000 (before other

credits), do not complete lines 9 and 10. Unused credit amounts may be carried forward for 15 years.

Rev. 2/12

Research Expense Tax Credit Worksheet - 2011 Page 2