1. A. The Maryland adjusted base amount for a partial or short year taxpayer is the Maryland base amount multiplied by a fraction:

   1. (1) The numerator of which is the number of days in the calendar year included in the partial or short tax year; and
   2. (2) The denominator of which is 365.

2. B. The Maryland qualified research and development expenses for a partial year taxpayer are:

   1. (1) The actual Maryland qualified research and development expenses incurred during the partial tax year incurred during the calendar year; or

   2. (2) The total Maryland qualified research and development expenses incurred during the entire tax year multiplied by a fraction:

      1. (a) The numerator of which is the number of days in the calendar year included in the partial tax year; and
      2. (b) The denominator of which is 365.

3. C. Subject to the limitations of this regulation, the partial or short year taxpayer may claim against the State income tax:

   1. (1) The basic credit in the amount of 3 percent of the Maryland qualified research and development expenses, not exceeding the Maryland adjusted base amount for the business entity, paid or incurred by the business entity during the taxable year; and
   2. (2) The growth credit in the amount of 10 percent of the amount by which the Maryland qualified research and development expenses paid or incurred by the business entity during the taxable year exceed the Maryland adjusted base amount for the business entity.

Authority: Tax-General Article, §§2-103 and 10-721, Annotated Code of Maryland

Effective date: March 4, 2002 (29:4 Md. R. 416)

Regulation .01B amended effective March 31, 2014 (41:6 Md. R. 377)

Regulation .04 amended effective March 31, 2014 (41:6 Md. R. 377)

Regulation .08A amended effective October 9, 2006 (33:20 Md. R. 1613); March 31, 2014 (41:6 Md. R. 377)

Regulation .08C adopted effective March 31, 2014 (41:6 Md. R. 377)

Regulation .13C amended effective March 21, 2011 (38:6 Md. R. 393)

Regulation .14 adopted effective February 9, 2009 (36:3 Md. R. 207)