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Maryland launches tax credit program for early-stage companies

Marty Rosendale

The Maryland Department of Commerce has launched a program of tax credits designed to help foster the growth of the state’s technology sectors by incentivizing investment in early-stage companies.

The Maryland Innovation Investment Tax Credit program, which has $2 million in funding for fiscal year 2022, will also help increase overall investments in current and emerging tech sectors, and boost the number of individual investors in Maryland tech companies, state officials hope.
To be eligible, a company must have 50 employees or less; an aggregate capitalization of at least $100,000; and be in a qualifying tech sector, which includes advanced manufacturing, aerospace, agriculture, artificial intelligence, blue technology, cybersecurity, education, energy and sustainability, financial, life sciences, quantum, and sensors and robotics.
Starting Nov. 1, investors that plan to invest in a particular qualified Maryland technology company can submit their applications for approval, with a deadline of Nov. 15 at 11:59 p.m. To submit an application, click here.
All approved investors can then participate in an online registration on Nov. 16 starting at 9 a.m. to determine the first-come, first-served order in which funds are made available.
As part of the program, investors will receive a refundable income tax credit equal to 33 percent of an eligible investment up to $250,000 in tax credits. The amount of the income tax credit increases to 50 percent of an eligible investment up to $500,000 in tax credits if the company is located in Allegany, Dorchester, Garrett or Somerset County.
Enhanced tax credits are also available for eligible investments made in certain technology companies located in Opportunity Zones. Additional eligibility requirements can be found here.
“Early-stage companies are critical drivers of innovation and job growth in Maryland,” said Marty Rosendale, CEO of the Maryland Tech Council. “The Maryland Innovation Investment Tax Credit will encourage investment in local startups that are competing in new industries with significant growth potential in our state. This is one more important step toward our goal of making Maryland the number one innovation economy for technology in the nation.”