Instructions For Schedule Rc - Research Credit

Line 9

The research credit may not reduce the excise below the $456 minimum tax that applies to all

business corporations. Enter the smaller of the amount from Part 2, line 1 minus the amount

on Part 2, line 8 minus $456 or the amount in Part 2, line 7.

Line 14

Enter the smaller of Part 2, line 9 (the maximum amount of research credit the corporation

may use in the current tax year) and Part 2, line 13 (the amount of the corporation’s own

research credit available for use).

Line 15

If the corporation is filing a Massachusetts combined return and has excess credits (Part 2,

line 13 is greater than Part 2, line 14) it may allow other members of the group to use those

credits. Enter the total amount of this corporation’s credit used by all other group members

this year.

Part 3. Reconciliation of Research Credit Carryover

Research credits are earned by and carried forward by individual corporations. In the event of

a merger, credits generated by a corporation absorbed in the merger are lost. Each

corporation must track its credits carried forward separately.

To determine the amount of credits that may potentially expire, taxpayers must track credits

still subject to the 15-year time limit by the taxable year in which they were generated.

Taxpayers must designate (by taxable year) which credits are being used in Part 3.

Credits used by a corporation against its own excise may use any available credits; normally

these should be subtracted first from the oldest time-limited credits available. Credits of one

corporation that are used by another corporation under the sharing rules may only be credits

for which the requirements of 830 CMR 63.32B.2 (9) are met. The total of this corporation’s

credits used from each prior year, whether the credits are used by this corporation or by its

affiliates, is entered in column (b). The total of the amounts in column (b) for lines 1-17

must equal the total on line 19.

A corporation that is a certified life sciences company may be authorized pursuant to the life

sciences tax incentive program to receive a refund of 90% of the amount of unused credit

available under sec 38M (but not for credits under 38W). Any such refund must be

specifically authorized by the Massachusetts Life Sciences Center. See TIR 08-23 for further

information. The total of credits for which such a refund is being sought (before the

reduction to 90% as required by sec 38M (j)) is entered on line 21.

If the corporation, after accounting for credits used against its own excise, credits shared with

affiliates and credits for which a refund is being requested as described above, has excess

credits available for carryover, some of those credits that are still subject to the 15-year time

limit may be converted to unlimited carryover status. The amount of credit eligible for

conversion is the lesser of the amount of unused credit still subject to the 15-year time limit

and the amount disallowed by the limitation on use in sec. 38M (d) (Part 2, line 1 minus Part

2, line 7). The amount converted is entered on line 22.

Taxpayers must designate by taxable year which credits are to be refunded or converted in

column (c). These credits should normally be subtracted from the oldest time-limited credits

first. If any credit still subject to the 15-year time limit is not used, refunded or converted by

Instructions For Schedule Rc - Research Credit - 2012 Page 7