2024 Massachusetts Life Sciences Tax Incentive Program Open

By Leanne Scott January 9, 2025

Co-authored by Leanne Scott & Lori Paci

The online portal for the 2024 Massachusetts Life Sciences Tax Incentive Program is currently open. Applications will be accepted until 5pm on Wednesday, February 19, 2025.

Overview

The Massachusetts Life Sciences Center (hereinafter “the MLSC” or “the Center”) was created in 2007. The Center receives annual funding from the state legislature to assist in supporting the growth and continued development of the life sciences industry in Massachusetts. The MLSC also engages in public-private funding initiatives.

One of the most popular and publicized programs offered by the Center since its inception has been the life sciences tax incentive program (hereinafter “the LSTIP”). This program allows eligible companies doing business in Massachusetts to select from a menu of tax incentives (for ex., a refundable research credit) that are designed to assist them in their growth within the Commonwealth. These incentives are intended to award companies for creating life sciences jobs in the state. The awards will generate taxpayer incentives of approximately $16,000 per job created. For the current round, which is the 16^th offering, the statutory funding cap was increased from $30 million to $40 million.

Among other things, to be considered for an award, a company must be registered to do business in the Commonwealth and in good standing with various state agencies. A company must have employed at least ten (10) permanent full-time employees in Massachusetts as of December 31, 2024. Additionally, a company must commit to hiring at least 10 net, new full-time employees during the 2025 calendar year, and must retain the increased headcount through at least 2027 (note: previously, jobs had to be retained for 5 years rather than 3). Annual reporting is required and awards can be clawed back by the state if headcount and other requirements fail to be met.

The 2024 program allows some applicants with only five (5) new, permanent full-time employees to apply, based on overall size (less than 50 overall employees) or preferred location status (i.e.,Gateway Cities and Barnstable, Berkshire, Bristol, Dukes, Franklin, Hampden, Hampshire, Nantucket, Plymouth, or Worcester Counties). There are also now premium awards available to those engaged in biomanufacturing, and to those in the previously mentioned locations.

Companies that receive an award will be notified by early May of 2025. Awards must be claimed during the state’s 2026 fiscal year, which will run from July 1, 2025, through June 30, 2026. For example, if a corporate excise benefit is selected and awarded, the award will be claimed by filing a corporate tax return claiming the award. For a calendar year taxpayer, this will mean that an extension of its 2024 Massachusetts corporate excise return will be necessary, as filing must be delayed until the state’s 2026 fiscal year.

How can BNN help?

BNN can assist qualifying companies in selecting the best tax incentives for their particular fact patterns and sizes. We have experience completing applications on behalf of companies, and performing high-level reviews of applications. We can also provide guidance on which employees qualify, based on company structure, residency and work locations, etc.

If the LSTIP is not currently the best option for your company, the Center offers a number of other programs for companies at all stages of the life sciences life cycle. Visit the funding programs section of their website to learn more.

Life sciences companies that do business in Massachusetts and expect to hire full-time employees in Massachusetts during the 2025 calendar year should consider learning more about and potentially applying for this program. If you would like to discuss how this program might benefit your company, please contact Leanne Scott, Lori Paci, or your BNN advisor at 800.244.7444.