Instructions For Schedule Rc - Research Credit

Instructions For Schedule Rc - Research Credit - 2012 Page 5

Line 11

Corporations which are members of a group which must compute the credit on an aggregate

basis must enter the total Massachusetts qualified research expenses made by all members of

the group in line 11. Corporations which are not members of an aggregated group should

enter the same amount shown in line 10 in line11.

Line 12

The Massachusetts fixed-base percentage is determined by dividing the corporation’s

aggregate Massachusetts qualified research expenses for all taxable years beginning after

December 31, 1983 and before January 1, 1989 by the corporation’s aggregate gross receipts

for such taxable years. If the corporation is calculating the credit using Massachusetts gross

receipts, both the fixed base percentage and the average annual receipts figure on line 13

must be calculated using Massachusetts gross receipts.

The fixed base percentage should be rounded to the nearest 1⁄100 of 1% and cannot exceed

16%. The Massachusetts fixed-base percentage for start-up companies is 3%. See Regulation

830 CMR 63.38M.1 (5) (c) 2, for the definition of start-up companies. If a corporation cannot

compute the Massachusetts fixed-base percentage due to inadequate records for the base

period, the Massachusetts fixed base percentage is 16%.

Corporations which are members of a group which must compute the credit on an aggregate

basis must calculate and enter in line 12 a fixed-base percentage for the group as a whole. See

Regulation 830 CMR 63.38M.1 (7)

Special rules also apply to the calculation of both the fixed base percentage in line 12 and the

average annual receipts in line 13 with respect to mergers and acquisitions. See Regulation

830 CMR 63.38M.1 (11).

Line 13

Enter the corporation’s average annual gross receipts (Massachusetts gross receipts, if that

election has been made) for the four taxable years preceding the taxable year for which the

credit is being determined. Corporations which are members of a group which must compute

the credit on an aggregate basis, enter the total receipts for the group.

Line 14

Multiply line 13 by the percentage in line 12. Enter the greater of this amount or 50% of the

qualified research expenses in line 11. The base amount cannot be less than 50% of the

current year qualified research expenses.

Line 15

Subtract line 14 from line 10. This amount equals the incremental qualified research expenses

which qualify for the credit.

Line 16

Multiply line 15 by 10% (.10). This amount equals the credit for qualified research expenses

before any limitations.

Instructions For Schedule Rc - Research Credit - 2012 Page 5