New Maryland Cybersecurity Investment Incentive Tax Credit

cyberBeginning in 2014, a refundable tax credit is provided for 33% of the investment in a qualified Maryland cybersecurity company, not to exceed $250,000. An “investment” means the contribution to a qualified Maryland cybersecurity company in exchange for an ownership interest in the equity of the company. Investment does not include debt.

A “cybersecurity company” is a company (i.e., excluding sole proprietorships) that is organized for profit that is engaged primarily in the development of innovative and proprietary cybersecurity technology, which are products or goods intended to detect or prevent activity intended to result in unauthorized access to, exfiltration of, manipulation of, or impairment to the integrity, confidentiality, or availability of an information system or information stored on or transiting an information system. Other details include:

  • The credit is first come-first served,
  • Investor must invest at least $25,000,
  • Must apply to Maryland Department of Business and Economic Development for certification,
  • Company must be based in Maryland and in business for no longer than five years,
  • Total capitalization of at least $100,000,
  • Owns or licenses proprietary technology,
  • Fewer than 50 employees,
  • Ownership interest is not publicly traded,
  • In good standing with Maryland,
  • Qualified investor does not include retirement plans (IRA, pension, etc.),
  • Credit is subject to recapture if investor disposes of ownership interest,
  • The application process for the credit will open in December 2013.

The SALT Group at KatzAbosch is available to help your business take advantage of these credits.

Please contact the KatzAbosch SALT Group if you have any questions regarding any SALT issues at 410-828-CPAS or email abareham@katzabosch.com

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