The Massachusetts Life Sciences Center (MLSC) Tax Incentive Program plays a central role in attracting and retaining life sciences companies by offering refundable and nonrefundable tax incentives that drive job creation, capital investment, and research and development (R&D) throughout the Commonwealth.

For life sciences companies planning to grow in Massachusetts, hiring decisions are rarely just about headcount. They are capital decisions that affect cash flow, runway, and long-term commitment to the Commonwealth.

That is where the Massachusetts Life Sciences Center (MLSC) Tax Incentive Program becomes especially relevant. For companies adding jobs in 2026, the program can materially offset the cost of growth through refundable tax credits that provide real cash benefits, not just future tax savings.

With up to $40 million available in the current funding round, this is a program worth evaluating before hiring plans are finalized.

Program Overview

The MLSC Tax Incentive Program is designed to support life sciences companies engaged in research and development, commercialization, and manufacturing. The program rewards job creation in Massachusetts and is available to companies of all sizes, from early-stage organizations to established operators expanding their footprint.

The 2026 application window opens January 12 and runs through March 31. Companies considering workforce expansion should begin planning now to ensure eligibility and alignment with program requirements.

Eligibility Considerations

At a baseline, applicants must:

    • Be registered to do business in Massachusetts
    • File a Massachusetts corporate tax return for the 2025 tax year
    • Employ at least 10 permanent, full-time Massachusetts-based employees as of December 31, 2025
    • Commit to hiring new full-time employees during calendar year 2026 and retaining those positions through at least December 31, 2028

The required number of net new hires depends on company size and location:

    • Companies located in a Gateway Municipality require a minimum of 5 net new hires
    • Companies based in Barnstable, Berkshire, Bristol, Dukes, Franklin, Hampden, Hampshire, Nantucket, Plymouth, or Worcester counties require a minimum of 5 net new hires
    • All other companies require a minimum of 10 net new hires
    • Companies with fewer than 50 Massachusetts-based employees as of December 31, 2025 require a minimum of 5 net new hires

Available Tax Incentives

What differentiates this program is not just the breadth of incentives, but the refundability of several credits. For many life sciences companies, especially those in growth mode, refundable credits can have a meaningful impact on cash flow and reinvestment capacity.

Available incentives include:

    • Life sciences investment tax credit, refundable
    • FDA user fees credit, refundable
    • 90 percent refund of excess Section 38M research credits, refundable
    • Extension of net operating loss carryforward from 5 to 15 years
    • Section 38W life sciences research credit
    • Deduction for qualified orphan drug expenses
    • Designation as an R&D company for sales tax purposes
    • Sales tax exemption for eligible property
    • Life sciences jobs incentive credit, refundable

Planning Ahead

Companies that plan to hire in 2026 and are making a long-term commitment to Massachusetts should view the MLSC Tax Incentive Program as more than a tax exercise. When evaluated early, it can meaningfully change the economics of growth.

At LGA, we work with life sciences companies to help them grow and reach their goals through our tax and advisory services. If you are planning to add headcount in Massachusetts in 2026, now is the right time to take a closer look.

For full program details and application materials, visit masslifesciences.com/programs/tax-incentive.