Massachusetts has made its ambitions clear: The state wants to be the global hub for climate tech, the anchor for life sciences, and a proving ground for the next generation of deep tech. The state is putting real money behind that goal, and the innovators building here have access to a layered set of government incentives that most are leaving on the table.
Here's what's available, what's changed, and how to approach it strategically.
The $1 Billion Signal
In 2024, Governor Maura Healey signed the Mass Leads Act, committing $1 billion in grants, tax incentives, and initiatives to support climate tech companies over the next decade. That legislation created the foundation for programs like the Climatetech Tax Incentives Program (CTIP), marking a clear signal that Massachusetts is competing aggressively for the companies shaping the energy transition.
The Massachusetts Clean Energy Center produced a 10-year plan to make Massachusetts the global hub for climate tech, projecting tens of thousands of new jobs and a significant draw on private investment. MassCEC interim CEO Jennifer Le Blond has compared the opportunity directly to what the life sciences sector became for the Commonwealth.
The challenge? Navigating the incentive landscape is genuinely complicated. As one MIT-trained founder put it: "even figuring out the types of permits that you need is a business."
The same is true for R&D tax incentives: The programs exist, the money is real, but capturing it requires expertise.
The State-Level Incentive Stack
Massachusetts has built one of the more comprehensive state-level R&D incentive environments in the country. Here's the core of it:
Massachusetts R&D Tax Credit
The Massachusetts R&D credit encourages businesses to invest in research and development activities that promote innovation and economic growth in the state, including developing new or improved products and processes, or improving software. The credit closely parallels the federal credit under Section 41 but with important differences.
The credit may not reduce a taxpayer's liability below $456. It's limited to the first $25,000 of corporate excise due, plus 75% of any excise due above that threshold. Unused credits can be carried forward for up to 15 years.
One planning note: Massachusetts follows many Section 41 definitions but decouples elements of the base calculation. It's important to model both the Regular and Alternative Simplified methods each year and maintain documentation that ties qualified research expenses to Massachusetts activities specifically.
Climatetech Tax Incentives Program (CTIP)
Launched under the Mass Leads Act, CTIP is designed specifically for companies in the climate tech sector. MassCEC may authorize up to $30,000,000 in tax incentives per calendar year for certified climatetech companies engaged in climate tech research, development, innovation, manufacturing, and deployment.
The program offers three credit types:
A one-year partially refundable job creation credit for companies adding at least five net new permanent full-time employees; a five-year refundable capital investment credit for facility owners who invest at least $5 million and commit to 50 net new full-time employees by year five; and a parallel leasing credit for tenants occupying at least 25% of a qualifying climatetech facility.
The maximum award per company is $7.5M across the program's life.
Massachusetts Life Sciences Center Tax Incentive Program
For biotech, diagnostics, medical devices, and AI in life sciences, the MLSC program is the primary vehicle. Up to $40 million in tax incentives are available in the current program round, aimed at companies looking to expand by creating new, long-term jobs in Massachusetts.
The program offers nine distinct tax incentives, several of which are refundable, including a Life Sciences Investment Tax Credit equal to 10% of qualified investments, a refund of up to 90% of unused R&D credits, a Section 38W Life Sciences Research Credit, and a Life Sciences Jobs Incentive Credit for companies creating 50 or more net new jobs.
Economic Development Incentive Program (EDIP)
For companies in priority growth sectors—including advanced manufacturing, climate tech, and robotics—certified job creation projects may receive a per-job credit of up to $5,000, with typical awards often falling in the $10,000 to $15,000 per-job range for high-impact projects. Credits may be layered with local Tax Increment Financing in many municipalities.
The Federal Layer: Section 41 R&D Tax Credit
None of the above replaces the federal opportunity. Under IRC Section 41, companies conducting qualified research in the U.S. (including in Massachusetts) can claim a credit of up to 20% of qualifying expenditures above a calculated base. For most companies using the Alternative Simplified Credit method, that's an effective credit rate of 14% on incremental qualifying expenses.
Qualified research expenses include wages paid to employees conducting R&D, a portion of contractor costs, and supplies consumed in the research process. The work must involve technological uncertainty, a process of experimentation, and be aimed at developing a new or improved product, process, software, or formula.
For Massachusetts companies, state and federal credits can be claimed simultaneously; and for many companies in cleantech, life sciences, and advanced manufacturing, the combined impact is material.
The Complexity Problem
Massachusetts has built real infrastructure for innovation. But as the WBUR reporting on the state's climate tech ambitions makes clear, the companies most likely to succeed are those that move fast, and the ones that struggle are those bogged down navigating complex systems alone.
Ben Downing, who will take over the top job at MassCEC, said the state needs to do better at making it simpler and easier for these teams to grow and scale. Tax incentive navigation is part of that picture.
The incentives described above don't just apply automatically. They require documentation, timing decisions, method elections, multi-year planning, and in some cases active certification applications. For cleantech founders piloting novel processes, life sciences companies running clinical trials, or software companies iterating on complex technical problems, there's a strong case that qualified activities are being missed.
Maximizing What's Available
Boast has helped more than 2,000 companies across North America access over $900 million in R&D tax credits since 2011. Our platform combines automated data collection with in-house R&D tax experts who understand how to identify qualifying activities, build defensible documentation, and navigate both federal and state programs, including Massachusetts.
For Massachusetts innovators, that means building a claim strategy that looks at the full stack: federal Section 41, the Massachusetts R&D credit, and any applicable sector-specific programs like CTIP or MLSC, depending on your industry and stage.
The goal Massachusetts has set for itself—to become the world's climate tech hub, to remain the anchor for life sciences, to cultivate the next generation of deep tech—only happens if the companies doing that work can fund it. The government incentives are there. The question is whether you're capturing all of them.
Get a free R&D tax credit assessment.
