Tax credits are beneficial to businesses and can be a significant resource, allowing a business to reduce the amount of taxes owed. Some tax credits are refundable, meaning that businesses can receive money back once they have paid off their tax liability.
Many tax credits have a certification process in which a business must be approved before they can claim a credit. In the case of these three tax credits, businesses must apply with the Department of Commerce, and once approved, they will receive a certification. This certification must be attached to the State tax filing alongside the Maryland Tax form 500CR, and must be filed online or request a waiver. Additional requirements are needed for individuals and pass through entities (PTEs). Find all tax forms for businesses here.
The Maryland Innovation Investment Tax Credit (IITC) provides an income tax credit of 33% to investors of businesses that are a Qualified Maryland Technology Company (QMTC) for up to $250,000 in tax credits. To qualify for this tax credit, an entity or individual must invest at least $25,000 in a QMTC, and the income tax return must be filed. Applications are currently open, and you can find more information regarding this tax credit on the Maryland Department of Commerce website.
The Buy Maryland Cybersecurity (BMC) Tax Credit provides an income credit of 50% of the purchase price for Maryland companies with 50 or fewer employees that purchase cybersecurity goods, products or services from Qualified Maryland Cybersecurity Sellers (QMCS). Learn more here.
The Employer Security Clearances Costs (ESCC) Tax Credit provides income tax credits for expenses related to federal security clearance costs, construction of Sensitive Compartmented Information Facilities (SCIFs) and first-year leasing costs for small businesses doing security-based contract work. Find out more about the ESCC tax credit here.
Article courtesy of the Maryland Comptroller.
