State program
Maryland Research and Development Tax Credit
A competitively allocated credit that is refundable for small businesses meeting asset thresholds.
- Partly refundable
- Pre-approval required
Last reviewed October 2026
Program overview
Maryland administers its research credit through the Maryland Department of Commerce under an annual statewide allocation. Applicants file by a fixed autumn deadline for the prior calendar year, and if certified claims exceed the cap the awards are prorated. Small businesses with net book value assets under the statutory threshold receive a refundable credit, which delivers cash to early-stage life sciences and technology companies that dominate the state's innovation economy.
Eligibility
Businesses with qualified research expenses incurred in Maryland that file an application with the Maryland Department of Commerce by the annual deadline. Refundability requires small business status based on net book value of assets.
Benefits
Non-refundable for large filers; refundable in cash for qualifying small businesses, subject to per-company and statewide caps.
Caps, deadlines and forms
Caps and limits
- Maryland administers its research credit through the Maryland Department of Commerce under an annual statewide allocation.
- Applicants file by a fixed autumn deadline for the prior calendar year, and if certified claims exceed the cap the awards are prorated.
- Non-refundable for large filers; refundable in cash for qualifying small businesses, subject to per-company and statewide caps.
Deadlines
- Applicants file by a fixed autumn deadline for the prior calendar year, and if certified claims exceed the cap the awards are prorated.
- Businesses with qualified research expenses incurred in Maryland that file an application with the Maryland Department of Commerce by the annual deadline.
Forms
Filing forms are listed by the revenue authority: official source (opens in a new tab).
Maryland IDR questions
What an examiner is likely to ask about this credit. S1–S7 apply to every state claim; the rest come from this program's own rules.
- S1Confirm the research was physically performed within Maryland.
- S2Provide the Maryland qualified research expense calculation and base amount.
- S3Reconcile Maryland expenses to the federal Form 6765.
- S4Show how wages and supplies were apportioned between Maryland and other locations.
- S5Provide the Maryland return and credit schedule for each year claimed.
- S6Show the carryforward schedule for unused Maryland credits.
- S7Confirm the entity claiming the credit is the entity subject to Maryland tax.
- MD-1Provide the pre-approval, certification or application filed for the Maryland credit, with its filing date.
- MD-2Show the Maryland refund eligibility tests (such as small business status) were met in each year refunded.
Draft questions for illustration, reviewed by a specialist before any engagement.
Common weak spots
- Expenses for research performed outside Maryland included in the Maryland claim.
- Missing or late pre-approval: the application or certification was not in place when required.
- Caps and proration not modelled, so the expected benefit is overstated.
- Refund claimed without evidence that the eligibility tests were met.
- Base amount computed from incomplete historical records.
See how your claim holds up
The mock audit drafts these questions for your own claim and scores the evidence behind each answer.
Run a mock audit for MarylandInformation on this page is general in nature, not tax advice. Program details change frequently; always confirm current rules with the relevant revenue authority or engage a specialist before acting. Last reviewed October 2026.
Find out what your research actually qualifies for
A scoping conversation takes thirty minutes and costs nothing. You leave with a view on eligibility, likely credit range and the documentation you would need.
Free R&D mock audit: completely free. Book a call or email hello@creditarmor.ai for a login.