Form 355s - Massachusetts S Corporation Excise Return

General Information

Transition rules apply to carryovers a QSUB may

vision may be carried over for an unlimited number

poration may claim either the ITC or the EOAC,

have generated in tax years beginning prior to

of years. This provision does not apply to the Re-

but not both with respect to each item of qualify-

January 1, 2009 when it was required to file as a

search Credit, the Harbor Maintenance Tax Credit,

ing property.

separate corporation under Massachusetts law.

Low-Income Housing Credit, Historic Rehabilita-

The 5% EOA credit cannot offset more than 50%

See Regulation 830 CMR 63.30.3.

tion Credit, the Full Employment Credit, the Film

of the excise due nor reduce the excise below the

Incentive Credit or the Medical Device Credit.

minimum tax. Any unused credit may be carried

S Corporation

forward for ten years.

Investment Tax Credit

To claim the credit, Schedule EOAC must be com-

Manufacturing corporations and corporations en-

Additional Excise

pleted and the amount of the credit entered on

gaged primarily in research and development, agri-

Schedule CR.

culture or commercial fishing are allowed a credit

Gross income for corporate excise purposes is

of 3% of the cost of depreciable real and tangible

Research Credit

the same as that defined under the U.S. IRC, as

property. Such property must have a useful life of

amended and in effect for the taxable year, with the

A credit is allowed for corporations which made

four years or more. The property must be used

following additions:

basic research payments and/or incurred quali-

and located in Massachusetts on the last day of

fied research expenses conducted in Massachu-

◗ interest from the bonds, notes and evidences

the taxable year. A corporation cannot take the

setts during the taxable year. A corporation taking

of indebtedness of any state, including

credit on property which it leases to another. A

the research credit is limited in the amount that

Massachusetts.

corporation can take the credit on property which

can be taken against the excise in any year. The

it leases from another (for property leased and

Net income is gross income less the deductions,

credit cannot reduce the tax to less than $456.

placed in service on or after July 1, 1994). Gener-

but not the credits, allowable under the U.S. IRC.

ally, eligible corporate lessees making qualifying

The amount of credit is equal to:

The following deductions are not allowed:

leasehold improvements may claim the credit.

◗ 100% of the first $25,000 of excise; and

◗ dividends received (see Schedule E-1 instruc-

Note: Motor vehicles and trailers acquired on or

◗ 75% of any amount of excise remaining after

tions); and

after January 1, 1988 and subject to the motor

the first $25,000.

◗ taxes for or measured by income, franchise

vehicle excise do not qualify for the Investment

taxes measured by income, franchise taxes for

The deduction allowed to a corporation for any

Tax Credit.

the privilege of doing business and capital stock

research expenses generating a Massachusetts

A corporation may carry over to the next succeed-

taxes imposed by any state or U.S. territory.

Research Credit must be reduced by the amount

ing three years any unused portion of its Invest-

of the credit generated. This amount is added

The deduction for losses sustained in other tax-

ment Tax Credit (ITC). To claim the ITC, Schedule

back to income on Schedule E, line 13.

able years is allowed, but subject to restrictions.

H must be completed where the credit is calcu-

See Schedule E-2 for further information.

Corporations which are members of a controlled

lated. The amount of the credit is then entered on

group or which are under common control with any

Schedule CR.

S corporations with total receipts of $6 million or

trade or business (whether or not incorporated)

more are liable for the income measure of the

Vanpool Credit

are treated as a single taxpayer for purposes of

corporate excise at the following rates:

determining the allowable Research Credit.

Business corporations are allowed a credit of

◗ 2.75% (.0275) on net income subject to tax, if

30% of the cost incurred during the taxable year

See Schedule RC instructions for further informa-

total receipts are $6 million or more, but less than

for the purchase or lease of company shuttle vans

tion. To claim the Research Credit, Schedule RC

$9 million; or

used in the Commonwealth as part of an em-

must be completed and the amount of the credit

◗ 1.83% (.0183) on net income subject to tax, if

ployer-sponsored ridesharing program. The shut-

entered on Schedule CR.

total receipts are $9 million or more.

tle vans must be used for transporting employees

and students from their homes, or public trans-

Harbor Maintenance Tax Credit

To determine if an S corporation is liable for the

portation facilities, to their places of employment

Corporations are allowed a credit against the cor-

income measure of the corporate excise, complete

or study.

porate excise for certain harbor maintenance

Massachusetts Schedule S. If line 17 of Schedule

taxes paid to the U.S. Customs Service pursuant

S is at least $6 million, complete Massachusetts

To claim the Vanpool Credit, Schedule VP must be

Schedule E and enclose a completed pro-forma

to IRC sec. 4461. A corporation is eligible for the

completed. The amount of the credit is then en-

U.S. 1120.

credit if the tax paid is attributable to the ship-

tered on Schedule CR.

ment of break-bulk or containerized cargo by sea-

Economic Opportunity Area Credit

Are There Special

and ocean-going vessels through a Massachusetts

harbor facility.

A credit of 5% of the cost of qualifying property

purchased for business use within an Economic

Tax Credits Available

The credit is not subject to the 50% limitation;

Opportunity Area (EOA) is available to businesses.

however, it may not reduce the tax to less than

To qualify for the EOA credit, the property must be

the minimum excise of $456. A taxpayer may car-

In Massachusetts?

used exclusively in a certified project in an EOA

ryover any excess credit to any of the next suc-

and must meet the same tests (4 years useful life,

ceeding five taxable years.

Yes. Massachusetts offers several special credits

etc.) imposed for the 3% ITC. A certified project is

and deductions to corporations.

See Schedule HM instructions for further informa-

a project that has been approved by the Economic

tion. To claim the Harbor Maintenance Tax Credit,

Under M.G.L. Ch. 63, sec. 32C, a corporation’s

Assistance Coordinating Council (EACC). If a cor-

Schedule HM must be completed and the amount

credits may not offset more than 50% of its ex-

poration participates in a qualified project and is

of the credit entered on Schedule CR.

cise. Any credits not utilized as a result of this pro-

also eligible for the 3% ITC (see above), the cor-

Form 355s - Massachusetts S Corporation Excise Return - 2012 Page 5

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