CIITC provides a refundable income tax credit to Qualified Investors who invest in Qualified Maryland Cybersecurity Companies (QMCCs). The purpose of this program is to attract investment in Maryland cybersecurity companies in order to help them grow, create jobs, and retain intellectual property in Maryland. BENEFIT Qualified Investors receive a credit equal to 33% of an eligible investment in a QMCC. There is a limit of $250,000 for the tax credit for a Qualified Investor in a fiscal year. A QMCC may not receive total credits exceeding 15% of the total program appropriation for each fiscal year. Total credits issued during the fiscal year cannot exceed the budget amount and are, therefore, issued on a first come basis. The credit is refundable to the extent that the amount of the credit exceeds the Qualified Investor’s Maryland income tax liability. For Qualified Investors who invest in a QMCC located in Allegany, Dorchester, Garrett or Somerset Counties, the amount of the credit is 50% of the investment in the QMCC, not to exceed $500,000. ELIGIBILITY A qualified investor is an individual or entity that invests at least $25,000 in a QMCC and is required to file an income tax return in any jurisdiction. A QMCC is a company that meets the following requirements and has been certified by the Department of Commerce (Commerce): o Is a going concern, organized for profit, and engaged primarily in the development of innovative and proprietary cybersecurity technology; o Has its headquarters and base of operations in Maryland; o Has an aggregate capitalization of at least $100,000; o Has fewer than 50 employees; o Has not participated in the CIITC for more than 2 years; o Has no publicly traded securities on any exchange; and o Is in good standing with the Department of Assessments and Taxation and is current on the payment of all tax obligations and not in default under any contract with the State of Maryland or any of its units or subdivisions. Note: Cybersecurity technology means 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.
QMCC PRE-CERTIFICATION
Beginning on August 15, 2018, Commerce will accept Form B applications for companies to be prequalified
as a QMCC. Early applications will be accepted through August 22, 2018. Notifications will
be sent no later than September 7, 2018.
APPLY
Beginning September 4, 2018, completed Investor Forms A.1, A.2 or A.3, with all attachments, will
be accepted at Commerce’s office: Tax Incentives Group, Cybersecurity Investment Incentive Tax
Credit, 401 E. Pratt Street, 17th Floor, Baltimore, MD 21202. Commerce will accept applications
from investors to enable participation in the electronic filing process that takes place starting on
October 2, 2018.
To qualify for the credit, please complete and submit the CIITC application forms to the Department
of Commerce. Include Investor Form (Form A1, A2 or A3) and the QMCC Form (Form B).
Qualified Investor Forms:
o Form A1 – Qualified Investor, Individual
o Form A2 – Qualified Investor, Corporation (all kinds including Sub-Chapter S)
o Form A3 – Non Sub-Chapter S Corporation Pass-Through Entities
Qualified Maryland Cybersecurity Company Form B for FY2019:
o Form B – Print out and submit via hard copy.
Note: Multiple Attachment 11 (Form B) is not required for investor applications if
prospective QMCC has a current Form B on file with the Department of Commerce and
is less than 30 days old.
Certification Process
1. September 4, 2018: Completed applications with all attachments will be accepted at the
Department of Commerce (ATTN: Tax Incentives) offices located at 401 E. Pratt Street, 17th
Floor, Baltimore, MD 21202. A User Name and Reference Number will be issued within
72 hours for applications received by September 24, 2018. Applications received after
September 24, 2018, will have a User Name and Reference Number issued after October 2,
2018.
2. The second step of the application process will require that the User Name and Reference
Number be used to complete the submission electronically beginning at 9:00 am EDT on
October 2, 2018 through the cybertaxcredit.choosemaryland.org website.
3. Submission order of the applications will be determined by “first come, first served” based
ONLY on the electronic submission of the User Name and Reference Number. No physical
application can be filed for purposes of the ordering of first come first served.
4. Multiple submissions by an applicant using the same user name and reference number will
be considered filed at the date and time of the LAST submission. This rule is to maintain
that the application procedure is as fair and equitable as possible.
5. Any decision made by Commerce during the application process is considered final.
Investor applications are reviewed and approved in the order received. After receiving a fully
completed application, Commerce will either issue an initial tax credit certificate certifying the
amount of an approved tax credit to a Qualified Investor or reject the application. A Qualified Investor
has 30 days after the date Commerce issues the initial tax credit certificate to make an investment in
the QMCC. Within 10 days after making the investment, the QMCC must provide written notice of
the investment, with supporting documentation, to Commerce. If the QMCC fails to provide a notice
of investment to Commerce within 40 days after the issuance of the initial tax credit certificate
Commerce will rescind the initial tax credit certificate. Based upon the actual investment, Commerce
will issue a final tax credit certificate.
Note: If a login window opens prompting you to input a user name/password, close the login window
to continue opening the form. Once the form is open, please remember to save it to your computer
before changing or completing the form.
RESOURCES
o Statute
o Senate Bill 228, Chapter 578
CONTACT
For more information about CIITC contact:
Abigail McKnight, Tax Specialist
Maryland Department of Commerce, Office of Finance Programs
(410) 767-7234
Kenneth McCreedy, Senior Director
Maryland Department of Commerce, Division of Cyber and Aerospace
(410) 767-6438
FREQUENTLY ASKED QUESTIONS
Could I invest $10,000 in “QMCC A” and $15,000 in QMCC B” to
satisfy the minimum investment of $25,000?
No. You must invest at least $25,000 in one transaction in a Qualified Maryland Cybersecurity
Company (QMCC) to claim the tax credit.
If I do not have a Maryland income tax liability, what will happen to my
refundable credit? Am I able to claim a carry back or carry forward?
There is no carryback or carry forward. A refundable credit means that a qualified investor is entitled
to the credit, and if there is no Maryland income tax liability, the investor will receive a check from the
state of Maryland upon filing a Maryland income tax return.
When does an investment have to be made if an investor is approved
for the tax credit?
Within thirty (30) days of the date of the initial tax credit certificate.
What type of information does Commerce require to verify an
investment was made?
Commerce requires the date of the investment, the amount of the investment, proof of receipt by the
QMCC, and a complete description of the nature of ownership interest in the equity of the QMCC.
What is the Maryland Cybersecurity Investor Incentive Tax Credit?
The program provides a refundable income tax credit to qualified investors in a Qualified Maryland
Cybersecurity Company (QMCC). The investor in the QMCC receives a credit of 33% of the
investment up to $250,000. This is increased to 50% for investment in QMCCs in Allegany,
Dorchester, Garrett and Somerset Counties up to $500,000.
Who is a qualified investor?
A qualified investor is an individual or entity that invests at least $25,000 in a QMCC, and is required
to file an income tax return in any jurisdiction. This does not include a qualified pension plan, an
individual retirement account, or any other qualified retirement plan. The qualified investor may not,
after making the proposed investment, own or control more than 25% of the equity interest in the
QMCC.
When can I expect to receive my User Name and Reference Number?
Investors who submit approved investor applications received before or on September 24, 2018, will be
given their User Name and Reference Number within 72 hours of submitting their application.
Investors who submit approved investor applications received after September 24, 2018, will be given
their User Name and Reference Number after October 2, 2018
