The application period for the 2025 Massachusetts Life Sciences Tax Incentive Program (LSTIP) opened in mid-January and will close at 2 p.m. on March 31, 2026. This program is offered through the Massachusetts Life Sciences Center (the MLSC, the Center).

Background

The MLSC is a quasi-public agency of the Commonwealth of Massachusetts. Since 2008, the Center has been charged with supporting and sustaining the life sciences industry in Massachusetts. The MLSC makes targeted investments and offers programs to directly assist life sciences companies operating in the state.

The LSTIP is one of the Center’s flagship programs. Each year, the Center is allocated funding via the Commonwealth’s budget process to enable the establishment of a competitive pool of various types of tax credits. The 2025 LSTIP is offering up to $40 million of tax incentives in exchange for the creation of net new jobs in the Commonwealth.

Who Qualifies for the LSTIP?

Unlike many tax credit programs that apply to all taxpayers who qualify under the applicable law, companies must apply and be awarded an incentive under this program. The basic qualifications are as follows:

• Life sciences company (broadly defined)
• Registered to do business in Massachusetts
• Be in good standing with the following Massachusetts agencies:
  • Department of Revenue
  • Secretary of State
  • Department of Unemployment Assistance
• Plan to file a Massachusetts corporate excise return for 2025 (either calendar or for a fiscal year ending after 12/31/2025)
• Employ at least ten (10) full-time equivalents (FTEs) working at least thirty-five (35) hours per week as of 12/31/2025 working in Massachusetts
• Commit to adding additional Massachusetts FTEs during the 2026 calendar year, and to retaining the positions through the 2028 calendar year. Specifically, the minimum commitments are as follows:
  • Five (5) net new FTEs if the company:
    • Employed less than fifty (50) permanent Massachusetts FTEs as of 12/31/2025
    • Is located in a Gateway Municipality, as defined under Mass. Gen. Laws (M.G.L.) Ch. 23A, § 3A
    • Is located in any of ten (10) specified counties – Barnstable, Berkshire, Bristol, Dukes, Franklin, Hampden, Hampshire, Nantucket, Plymouth, or Worcester
  • Ten (10) net new FTEs for all other companies

There are additional rules regarding computation of FTEs and headcount within corporate groups, as well as when an individual qualifies as a Massachusetts permanent FTE.

What Types of Incentives Are Available?

The Life Sciences Tax Incentive Program currently offers a menu of various tax incentives for applicants to choose from. The menu is comprised of both corporate excise and sales/use tax benefits, as well as a refundable jobs credit. Most importantly, a number of the incentives convert otherwise nonrefundable tax assets (for example, research credits) to refundable ones, putting cash in the hands of those who are awarded incentives.

See generally Mass. Dept. of Revenue Technical Information Release 08-23 (2008).[1]

Applicants may choose a single incentive or a combination of incentives. In general, each new FTE created will yield $18,000 in calculating a potential award. Additional awards of $5,000 per net new job are available for new jobs created in certain locations, for companies new to Massachusetts, and for those companies with fewer than fifty (50) employees, as well as those involved in creating manufacturing jobs.

It is important for companies to work closely with their tax advisors in determining which incentive(s) would be best for them.

How to Apply

Applications for the 2025 Massachusetts Life Sciences Tax Incentive Program are accepted only through the MLSC’s website. (See Tax Incentive – MLSC.)[2] In order to be considered for this current round of funding, an application must be submitted no later than 2 p.m. Eastern Standard Time on Tuesday, March 31, 2026.

An account must be created in order to apply, and it is possible to add collaborators to assist with the process. Additionally, it is possible to denote that certain portions of an application are proprietary in nature and thus protected under the Commonwealth’s public records laws.

Applications should include certificates of good standing from the following Massachusetts state agencies: the Department of Revenue, the Secretary of State, and the Department of Unemployment Assistance. It is important to apply for those sooner rather than later to avoid delays.

Once the application window closes, the review period will begin. Companies that receive an award will be notified in June of 2026. Awards may not be claimed until after July 1, 2026, when the Commonwealth’s new fiscal year begins.

Key Considerations

Applicants should be aware that clawback provisions may apply to those who do not fulfill job targets over a specified period of time. Successful applicants will be required to provide regular reports to the MLSC in support of the Center’s mandated role in monitoring hiring and retention. As such, companies should be realistic when inputting job commitment numbers.

The LSTIP can provide extremely valuable benefits for life sciences companies, often allowing early-stage companies to monetize existing tax attributes that they may have been otherwise unable to utilize. However, if this particular program is not one that a company currently qualifies for, the MLSC offers a wide range of other resources and funding programs to explore. See Massachusetts Life Sciences Center.[3]

How A&M Can Help

Our team has many years of experience with this program. We can help by advising companies on which incentives they should apply for, based on their current Massachusetts tax situation. We can also help with reviewing or preparing the online application. If a company is awarded an incentive and has questions about how to claim it, or has other more foundational questions such as whether they qualify, we are able to advise in those areas as well.

Should you have any questions about the 2025 LSTIP, or wish to discuss further how it could benefit your company, please contact Leanne Scott, L.Scott@AlvarezandMarsal.com, or your preferred A&M Tax contact, to schedule a time to discuss.

[1] Commonwealth of Massachusetts, TIR 08-23: Life Sciences Tax Incentive Program under St. 2008, c. 130, November 21, 2008.

[2] Tax Incentive, Massachusetts Life Sciences Center, accessed February 25, 2026.

[3] Massachusetts Life Sciences Center, Tax Incentive, accessed February 25, 2026.