global Tax Is Your Business Leaving State Tax Credits on the Table? December 15, 2025 Your business might be sitting on hidden state tax credits in Rhode Island and Massachusetts; let’s make sure you’re not leaving money on the table. When businesses think about tax planning, the focus often turns to federal incentives, like the R&D tax credit or energy-related deductions. But at the state level, there’s a rich landscape of credits and incentives that can significantly reduce your tax liability and support your growth strategy. The challenge? Many businesses don’t know these opportunities exist, or assume they don’t qualify. For purposes of this article, let’s explore some valuable credits available in Rhode Island and Massachusetts. Quick Takeaways Many RI and MA businesses overlook state tax credits that could directly reduce tax liability.Credits are available for job creation, R&D, capital investment, workforce training, and sustainability projects.Early planning, proper documentation, and coordination with federal credits are key to maximizing benefits.Some credits require pre-approval, so acting proactively and early, is essential. Common Categories of State Tax CreditsWhile programs vary by state, here are some of the most common types of credits businesses overlook:1. Job Creation and Hiring CreditsStates often reward businesses for creating new jobs, particularly in targeted industries or underdeveloped areas. Some examples include:New Jobs Tax Credits: Offered when you hire and retain employees for a certain period.Enterprise Zone Credits: Incentives for hiring within designated economic development zones.Veteran or Long-Term Unemployment Hiring Credits: Encourage inclusive hiring practices while reducing costs.2. Research & Development (R&D) CreditsMany states mirror or supplement the federal R&D credit, allowing you to claim both for the same qualified R&D activities. These credits reward investments in product improvement, software development, or process innovation, even if you don’t have a dedicated lab.3. Investment and Capital Expansion CreditsIf you’re investing in new equipment, technology, or facilities, you may qualify for credits that offset part of those costs. Some states even provide enhanced benefits for projects that bring economic development to rural or distressed regions.4. Training and Workforce Development CreditsStates are increasingly helping employers train and advance their workforce through training tax credits. These programs often cover a percentage of expenses for employee education, technical instruction, or apprenticeships.5. Green Energy and Sustainability CreditsFrom installing solar panels to upgrading HVAC systems, environmentally conscious improvements can qualify for state-level sustainability or energy-efficiency credits, on top of any federal incentives.What state tax credits are available in MA and RI?StateCredit NameWho QualifiesTypical BenefitQuick TipRIQualified Jobs Incentive Tax CreditBusinesses creating new full-time jobs in RI (or relocating jobs into the state).Up to $7,500 per new job per year, for up to 10 years, based on wages and location.Apply before hiring—credits can’t be claimed retroactively.RIInvestment Tax Credit (ITC)Companies investing in qualifying property (manufacturing, finance, real estate, etc.) that meet wage/training thresholds.Generally 10% of qualifying tangible property investment.Keep invoices, placed-in-service records, and payroll data.RIResearch & Development (R&D) Tax CreditBusinesses incurring qualified research expenses in RI (may mirror federal R&D activities).22.5% of first $111,111 of QREs and 16.9% thereafter.Coordinate carefully with your federal R&D claim to avoid double counting.RIRebuild Rhode Island / Historic Tax CreditDevelopers or owners rehabilitating historic or commercial properties for business use.Up to 20–30% of qualified project costs.Secure pre-approval early — funds are limited and awarded by round.MAEconomic Development Incentive Program (EDIP)Businesses investing and creating jobs in MA, especially in target industries or Gateway Cities.Custom-negotiated; often $10k–$15k per job, tied to investment commitments.Coordinate early with your local EDIP contact before breaking ground.MADisability Employment Tax Credit (DETC)Employers hiring qualified individuals with disabilities who meet program rules.Up to $5,000 (30% of wages) first year; $2,000 (30%) second year.Include HR in the application—eligibility depends on proper certification.MAInvestment Tax Credit (ITC)Manufacturing, R&D, and certain other corporate taxpayers purchasing qualifying property.Typically 3% of qualifying property value (under M.G.L. c.63 § 31A).Combine with federal depreciation strategies for maximum impact.MABrownfields Tax Credit (BTC)Businesses cleaning up contaminated sites in MA under DEP rules.25–50% of cleanup costs, depending on site use and institutional controls.Great for redevelopment projects — coordinate with environmental consultants.MACommunity Investment Tax Credit (CITC)Businesses or individuals contributing to qualified community development organizations.50% refundable credit for eligible cash contributions. MALife Sciences CreditLife sciences businesses operating in Massachusetts. Increased percentages for ITC and R&D credits. Also allows for the R&D and ITC MA tax credits to be fully refundable. Requires an application to Massachusetts Life Sciences Center which is due by 2nd week in February and receive approval from state. MAMassachusetts Manufacturers Property Tax ExemptionManufacturing companies who meet certain property, payroll, and sales thresholds in Massachusetts.Full property tax exemption for tangible property used in the manufacturing process. Requires a business to complete an application by December 31 and receive approval from state. FAQ — State Tax CreditsCan I claim both federal and state R&D credits? Yes, but you must carefully allocate expenses to avoid double-counting. Consult a tax advisor to optimize your claims.Do all credits require pre-approval? No, but many, like RI Qualified Jobs Incentive and MA EDIP, require formal agreements before claiming. Always check the program rules.Which tax credits are refundable? Some are refundable (e.g., MA Community Investment Tax Credit), while others reduce your tax liability or carry forward to future years.What documentation should I keep? Payroll records, invoices, capital asset documentation, employee certifications, project plans, and pre-approval agreements are typically required.How do I get started? Identify which credits apply to your business, gather documentation, and consult your tax advisor or the administering agency (RI Commerce, MA DOR, MassDevelopment, etc.) to submit your claim.
