Instructions For Schedule Rc - Research Credit

Line 21

Corporations which are part of an aggregated group will compute the group credit based on

the activities and base amounts for the group as a whole (the total of the amounts on line 5

and line 16) and then determine the portion of that credit allocated to each corporation based

on its share of basic research payments and qualified expenses.

Corporations which are not part of an aggregated group will have a 100% allocation

percentage on line 19 and line 21 will equal the total of lines 5 and 16.

Corporations are required to reduce their deduction for research expenses by the amount of

the credit generated. Corporations which report their income on Form 355 or 355S make this

adjustment on Schedule E, line 13. Corporations reporting their income on Form 355U make

this adjustment on Schedule U-E, line 20.

Part 2. Massachusetts Research Credit Used

Line 1

Excise before credit. Corporations not participating in a combined return enter the amount

from Form 355, line 5 or Form 355S, line 8. Corporations filing Form 355U enter the total

excise for the year, including both the income and non-income measures. This amount is

calculated on Schedule U-IC, line 1.

Line 2

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

basis must enter the total of the excise before credit amounts of all members of group.

Corporations which are not members of a group, enter the amount shown in line 1 in line 2.

Line 4

If the corporation is not a member of an aggregate group, or if the total excise for the group

shown in line 2 is less than or equal to $25,000, enter the amount from Part 2, line 1 here.

Otherwise, multiply the amount on line 1 by the allocation percentage in line 3.

Line 7

The credit a corporation may take against excise in a given year is limited to the first $25,000

of excise (or the corporation’s share of that amount if it is part of a group) plus 75% of any

excise in excess of $25,000. Enter that amount in line 7.

Line 8

If a corporation qualifies for several credits, which combined with the allowable research

credit would reduce the corporate excise below the minimum tax; a choice must be made as

to which credits will be utilized because of the minimum tax limitation.

For example, XYZ Co. with $1,000 of corporate excise, $500 of vanpool credits and $1,000

of research credits could apply $500 of vanpool credits to the corporate excise. XYZ Co.

would then be able to use only $44 of the research credit because the excise (after applying

the vanpool credit) is already reduced to $500. In this scenario, XYZ would be able to carry

forward the unused research credits. Alternately, XYZ could have chosen to use $544 of

research credit and no vanpool credit, but the vanpool credits would have expired. If the

corporation is taking other credits against its excise this year, enter the total of those credits

in line 8.

Instructions For Schedule Rc - Research Credit - 2012 Page 6