Instructions For Schedule Rc - Research Credit

Instructions For Schedule Rc - Research Credit - 2012 Page 3

Are Research Credit Carryovers Allowed?

Yes. The research credit cannot reduce the corporation’s excise below the minimum excise

and cannot reduce the excise over $25,000 by more than 75%. Credits which exceed these

limitations can be carried over to future tax years and applied against the corporate excise.

There are two types of carryovers:

Unlimited Carryover

A corporation may carry over for an unlimited period of time any portion of the credit which

is disallowed under the 75% limitation. Credits disallowed under the 75% limitation equal

25% of the corporation’s excise which exceeds $25,000.

15-Year Carryover

Any credits disallowed which are not given unlimited status, may be carried forward for

fifteen years.

Record Keeping Requirements

Corporations claiming the Research Credit must maintain adequate records to substantiate the

calculation of the credit. See Regulation 830 CMR 63.38M.1 (14), as amended October 2,

1998.

Schedule RC Line Information

Part 1. Massachusetts Research Credit Generated

Each corporation which generates or uses Massachusetts Research Credit must complete

Schedule RC as part of their separate return.

Each corporation must check the appropriate box to indicate whether Massachusetts or

federal gross receipts are being used for the calculations.

Only corporations electing to calculate credits separately for defense and non-defense

activities or corporations claiming the Life Sciences Research Credit under sec. 38W should

complete the second question.

Corporations calculating the 38M credit separately for defense related activities complete

Part 1 separately for defense and non-defense activities but combine the credits generated

from the two schedules when completing Part 2 and Part 3.

Corporations claiming the Life Sciences Research Credit under sec. 38W that also have

credits due under sec. 38M, either from the current year or carried over from a prior year,

must separately use or carry forward the credits by completing separate Part 2 and Part 3

pages for credits generated under 38M and credits generated under 38W.

Line 1

Enter the amount of basic research payments which relate to basic research activity

conducted in Massachusetts. These expenses must qualify under section 41(e) (2) of the IRC.

Instructions For Schedule Rc - Research Credit - 2012 Page 3