Maryland Form 504cr - Business Income Tax Credits For Fiduciaries - 2013 Page 15
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232013
FIDUCIARY’S BUSINESS INCOME
MARYLAND
FORM
TAX CREDITS INSTRUCTIONS
504CR
Part K-I – Research and Development Tax Credits for
including biomolecules (DNA, RNA, or protein), cells, tissues or
Businesses Not Certified as a “Small Business”
organs. The QMBC must:
There are two credits. The Basic Credit is 3% of the qualified
• Have its headquarters and base of operations in Maryland;
Maryland research and development expenses paid during the
• Have fewer than 50 full-time employees;
tax year, up to a base amount. The Growth Credit is 10% of the
• Have been in active business no longer than 10 years;
Maryland research and development expenses paid during the tax
year that exceed the base amount.
• Have been certified as a biotechnology company by DBED;
and,
Certification must be obtained from the Maryland Department of
Business and Economic Development (DBED) before the credit
• Must not have any securities publicly traded on any
can be claimed. The credit must be taken for the tax year in which
exchange.
the expenses were incurred. Therefore, an electronic amended
A QMBC includes:
return may need to be filed. A copy of the certification from DBED
must be included with the return.
• A company that has been in active business for up to 12
years, with DBED approval;
Whenever this credit is claimed against the income tax, an addition
modification must be made for the tax year in which the research
• For fiscal years 2012 and 2013 only, a company that has
and development expenses were paid.
been in active business for up to 15 years; or,
Claiming the Tax Credit
• A company that has been in active business no longer
than 10 years from the date the company first received a
The business will enter the DBED-certified Basic Credit (3%) on
qualified investment.
line 1, Part K-I.
The investor:
On line 2, Part K-I, the business will enter the amount of the
DBED-certified Growth Credit (10%).
• Can be an individual or any entity (except a retirement
plan), and must make an investment of at least $25,000 in
Line 3, Part K-I, will reflect the sum of line 1 and line 2. This
a QMBC (but not own more than 25% of the equity interests
amount is carried to line 11, Part W. Also, this amount is an
in the company after making the investment);
addition modification on the tax return.
• Must be required to file an income tax return in any
Part K-II – Research and Development Tax Credits
jurisdiction; and,
for Businesses Certified as a “Small Business”
• Must apply for and receive final certification from DBED to
If a business that is eligible to claim the Research and Development
claim the Biotechnology Investment Incentive Tax Credit.
Tax Credit is a “small business,” the credit is calculated in basically
the same manner, but Part K-II is used.
The amount of the credit is 50% of the investment in the qualified
Maryland biotechnology company, not to exceed $250,000. The
A “Small Business” is defined as a for-profit corporation, limited
investment must be the contribution of money in cash or cash
liability company, partnership or sole-proprietorship with net
equivalents expressed in United States dollars, at risk of loss,
book value assets totaling at the beginning or the end of the tax
to a QMBC in exchange for stock, a partnership or membership
year for which the Maryland qualified research and development
interest, or other ownership interest in the equity of the company
expenses are incurred, as reported on the balance sheet, less
title to which ownership shall vest in the qualified investor. The
than $5,000,000.
investment cannot include debt. See §10-725 of the Tax-General
Claiming the Tax Credit
Article and Code of Maryland Regulations 24.05.03.
The business will enter the DBED-certified Basic Credit (3%) on
For questions on application and certification processes or for
line 4, Part K-II.
additional information on this credit program, contact:
On line 5, Part K-II, the business will enter the amount of the
Maryland Department of Business and Economic Development
DBED-certified Growth Credit (10%).
Office of Finance Programs, Tax Incentives Group
401 E. Pratt St.
Line 6, Part K-II, will reflect the sum of line 4 and line 5. This
Baltimore, MD 21202
amount is carried to line 6, Part Y. Also, this amount is an addition
410-767-6438 or 410-767-4980
modification on the tax return.
For certification and further information contact:
Specific Requirements
Maryland Department of Business and Economic Development
The investor may claim the tax credit for the amount provided
Office of Finance Programs, Tax Incentives Group
in the final certificate. If the credit amount exceeds the tax due,
401 E. Pratt St.
then a refund for the excess amount may be claimed. The credit
Baltimore, MD 21202
cannot be claimed until the date of issuance of the final certificate.
410-767-6438 or 410-767-4980
It must be claimed on the Maryland income tax return for the tax
year in which the investor makes the investment in the QMBC.
Both the final certificate received from DBED and a statement of
PART L - BIOTECHNOLOGY INVESTMENT INCENTIVE TAX
affidavit (see below) as prepared by the investor are required to
CREDIT
be included with your return for the Biotechnology Investment
General Requirements A credit is available for an investment
Incentive Tax Credit to be allowed. Complete Part L using the
in a qualified Maryland biotechnology company (QMBC). To
information provided in the final certificate and enter the amount
qualify, a company can be any entity of any form (except a sole
of the approved investment on line 1.
proprietorship) that is duly organized and existing under the laws
On line 2, Part L, enter 50% of the approved investment.
of any jurisdiction for the purpose of conducting business for profit,
Line 3, Part L, reflects the maximum dollar amount of credit per
and must be primarily engaged in the research, development,
investment ($250,000) and no entry is made on this line.
or commercialization of innovative and proprietary technology
that comprises, interacts with, or analyzes biological material
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