Schedule H: Investment Tax Credit (2024)

Who files this form

Schedule H calculates the investment tax credit for corporations. The form lists these corporation types:

• Classified manufacturer
• Agriculture
• Commercial fishing
• Research and development (R&D)

Select one corporation type. R&D corporations must also complete the receipts test on line 1.

What you'll need

Have the following information ready to complete Schedule H:

• Corporation name and federal identification number.
• Costs of qualified depreciable property owned or leased in Massachusetts, grouped by the categories on line 2. Separate machinery and leasehold improvements by whether they are taxed locally.
• Total U.S. investment tax credit and U.S. basis reduction.
• Any credit reduction for assets placed in service during the current year that no longer qualified at year end.

R&D corporations also need total receipts and R&D receipts assignable to Massachusetts, plus a description of their R&D category.

If any credits have been converted from expiring to non-expiring, enclose a statement with the return.

How to file

The 2024 return must be filed electronically. Paper returns will not be accepted.

Report the net current-year investment tax credit from Schedule H, line 8, on Schedule CMS.

For questions about electronic filing, call 617-887-6367. See the Massachusetts DOR electronic filing and payment requirements for more information.

Common mistakes

• Sending a paper return. The form warns that electronic filing is required and paper returns will not be accepted.
• Leaving out a credit-conversion statement. The form reminds you to enclose a statement if any credits have been converted from expiring to non-expiring.

Questions people ask

How is the available current-year credit calculated?

Add the eligible property costs on lines 2a through 2h. Subtract the total U.S. investment tax credit and U.S. basis reduction on line 4. Multiply the remaining amount on line 5 by 3% to calculate line 6.

What property categories does the form list?

Line 2 lists qualified buildings, machinery, equipment, fixtures, leasehold improvements, and other fixed depreciable assets. The property must be located in Massachusetts and may be owned or leased.

Which receipts do R&D corporations report?

Line 1 asks for only receipts assignable to Massachusetts. Enter total receipts on line 1a and R&D receipts included in that total on line 1b. Divide line 1b by line 1a for line 1c, and describe the R&D category on line 1d.

Where do I report the net credit calculated on Schedule H?

Report the net current-year investment tax credit from line 8 on Schedule CMS.

Official sources

• https://www.mass.gov/lists/dor-tax-forms-and-instructions